---
title: "Build a franchisee's issue table from the disclosure document"
url: "https://ailawframework.com/practice/franchising-and-distribution/build-a-franchisee-due-diligence-issues-list-from-the-disclosure-pack/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A34-T1-R4-US"
practice_area: "Franchising & Distribution"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Build a franchisee's issue table from the disclosure document

> Extract Item 3 litigation, Item 4 bankruptcy, the fee items, territory, supplier restrictions and the Item 20 outlet counts into a table with page cites. Do not advise whether to buy the franchise.

Canonical page: https://ailawframework.com/practice/franchising-and-distribution/build-a-franchisee-due-diligence-issues-list-from-the-disclosure-pack/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Franchising & Distribution](https://ailawframework.com/practice/franchising-and-distribution.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Extract Item 3 litigation, Item 4 bankruptcy, the fee items, territory, supplier restrictions and the Item 20 outlet counts into a table with page cites. Do not advise whether to buy the franchise. |
| What the lawyer must review | You decide what to tell the client. The cover statements in 16 C.F.R. § 436.3 include that no governmental agency has verified the disclosure document, and that there may be state franchising laws. Opinion 512 leaves the advice with you. Do not let the tool turn an Item 19 figure, or an oral earnings claim, into a conclusion that the outlet will make that money. Section 436.9(c) restricts financial performance representations that are not in Item 19. |
| Written for | United States |
| Applies to | [Build a franchisee due-diligence issues list from the disclosure pack](https://ailawframework.com/practice/franchising-and-distribution/build-a-franchisee-due-diligence-issues-list-from-the-disclosure-pack.md) |

## Checking plan

- What the AI does: Extract Item 3 litigation, Item 4 bankruptcy, the fee items, territory, supplier restrictions and the Item 20 outlet counts into a table with page cites. Do not advise whether to buy the franchise.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Item 20 is outlets and franchisee information. The counts are the franchisor's disclosure, not a government census.
- Ask the state agency as the cover page says. This version does not list registration states.

## Sources

- [16 C.F.R. Part 436, Franchise Rule](https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-436) (checked 2026-10-22)
- [ABA Formal Opinion 512, Generative Artificial Intelligence Tools (29 July 2024)](https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/ethics-opinions/aba-formal-opinion-512.pdf) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*