AI Disclaimer

FranVantage was built by a 30-year investment operations and credit professional who applies credit-analysis principles to franchise disclosure documents. The goal: be a real second set of eyes on the 200+ page documents prospective franchise buyers are handed, and a companion through the due diligence process.

FranVantage uses artificial intelligence ("AI") to do that analysis. This page explains exactly what the AI does, where it has limits, and how the product is structured. The limitations are real. We disclose them honestly — and we've built the product to reduce them.

1. What AI Does

FranVantage uses large language models (LLMs) to process and analyze FDD documents. Specifically, the AI system:

• Extracts text from uploaded PDF documents using optical character recognition (OCR).
• Identifies and classifies the 23 mandatory FDD disclosure items.
• Extracts financial data including fees, costs, revenue figures, and financial statement entries.
• Identifies contractual terms, obligations, restrictions, and renewal conditions.
• Calculates key performance indicators (KPIs) such as breakeven estimates, royalty impact, and investment ranges.
• Assesses risks by analyzing litigation history, termination patterns, franchisee turnover, and contractual provisions.
• Generates editorial summaries, synthesis narratives, and action item recommendations.

2. How FranVantage Is Built to Reduce These Risks

Generic AI chat tools generate answers without showing their work. FranVantage is designed differently:

• Source-referenced findings. Findings are linked back to the source FDD with the quote, item, and section. You can verify the original language in the document rather than taking the AI's word for it.
• Evidence verification. Citations are checked against the source FDD text to confirm they reflect what the document actually says.
• Quality gates. When the system can't confidently analyze a section, it tells you — instead of guessing. Items below a confidence threshold are skipped rather than presented as findings.
• Plain-English summaries. Findings are written in accessible language alongside the legal source text, so you can cross-check what the AI said against what the FDD actually says.
• Personal notes and flagging. You can annotate findings, flag anything that looks wrong, and report errors directly from the analysis interface.

These structural choices don't eliminate AI limitations. They give you the tools to catch them.

3. Known Limitations

AI-generated analysis is subject to real limitations. You should be aware that the system:

• May misread numbers from scanned or OCR'd documents. Optical character recognition can introduce errors, particularly with low-quality scans, handwritten annotations, or unusual formatting. Financial figures may be extracted incorrectly.
• May misinterpret legal language or miss provisions. FDDs contain complex legal terminology and cross-references. The AI may fail to identify material provisions, misunderstand conditional language, or overlook provisions buried in dense legal text.
• Generates hypothetical financial projections. All financial models, breakeven analyses, and profitability estimates are modeled scenarios based on data disclosed in the FDD. They are not forecasts, guarantees, or predictions of actual financial performance.
• Cannot assess your personal circumstances. The AI has no knowledge of your financial situation, risk tolerance, investment objectives, creditworthiness, local market conditions, or personal qualifications for franchise ownership.
• Cannot evaluate qualitative factors. The AI cannot assess franchisor reputation, management quality, brand trajectory, market saturation in your territory, or other qualitative factors that materially affect franchise success.
• May generate statements not supported by the source document. Large language models can occasionally produce plausible-sounding statements that are not present in or supported by the source FDD. This is why source-referenced findings and citation verification matter — they give you the tools to catch these instances. No system is infallible.

4. What This Service Is NOT

FranVantage is not:

• A law firm or provider of legal advice.
• An accounting firm or provider of accounting or tax advice.
• A broker-dealer or registered investment advisor.
• A provider of financial, investment, or tax advice of any kind.
• A substitute for professional review of a Franchise Disclosure Document or franchise agreement.

Use of the Service does not create any professional-client, attorney-client, or fiduciary relationship between you and FranVantage, its officers, employees, or affiliates. FranVantage is designed to be a companion to your due diligence — not a replacement for the professionals you should consult before signing a franchise agreement.

5. Getting the Most From FranVantage

FranVantage is most useful as one structured input within a broader due diligence process. To use it well:

• Verify extracted data against the original FDD. Source-referenced findings make this straightforward — click through to the cited passage and confirm the language. Treat anything that looks unusual as worth double-checking.
• Have a qualified franchise attorney review the FDD and franchise agreement. An experienced franchise attorney can identify provisions, risks, and negotiation opportunities that AI cannot.
• Have a CPA or financial advisor review the financial projections. A qualified financial professional can evaluate projections in the context of your personal financial situation, tax implications, and investment objectives.
• Speak with existing and former franchisees. Item 20 of the FDD lists current and former franchisees. Direct conversations provide qualitative insights that no document analysis — AI or otherwise — can replicate.
• Make investment decisions based on your own due diligence. AI analysis is one input among many. It should not be the sole or primary basis for any franchise investment decision.

6. Understanding the Risk

Franchise investments involve substantial financial risk, including the potential for total loss of invested capital. The Federal Trade Commission, state franchise regulators, and franchise industry associations all emphasize the importance of thorough due diligence before investing.

AI-generated analysis is inherently limited and probabilistic. It is one input to your due diligence — not the entirety of it, and not a substitute for professional advice or careful deliberation.

By using the Service, you acknowledge and agree that you assume all risk associated with the use of AI-generated analysis and any decisions made in whole or in part based on its outputs. FranVantage shall not be liable for any losses, damages, or adverse outcomes resulting from reliance on AI-generated content.

7. AI Transparency Disclosure

FranVantage voluntarily discloses the following information about how artificial intelligence is used in our Service. This disclosure reflects the principles of Colorado's revised AI law (SB 26-189), which Governor Polis signed on May 14, 2026 and which takes effect January 1, 2027. SB 26-189 replaced the original Colorado Artificial Intelligence Act (SB 24-205) before it took effect. We provide this disclosure regardless of whether the Service falls within the scope of any specific state AI law.

• AI Usage. FranVantage uses artificial intelligence to analyze franchise disclosure documents. The AI system reads, extracts, and interprets information from FDDs to generate analysis outputs including financial models, risk assessments, contract term summaries, and action items.
• Consequential Decisions. This AI system produces analysis that may influence consequential financial decisions, including whether to pursue a franchise investment. The outputs should be treated as one informational input among many, not as definitive guidance.
• Your Rights. You have the right to:
  • Know that AI is being used to generate analysis of your documents.
  • Verify AI-extracted data against the original FDD source document.
  • Correct inputs and data through the model editor feature within the Service.
  • Contact us with any questions or concerns about AI-related aspects of the Service.
• Technology. Our AI system processes documents using Amazon Bedrock infrastructure with Anthropic Claude foundation models. Document text is extracted using Mistral OCR. Analysis passes use a multi-tier architecture with citation verification.
• Training Data. We do not use your uploaded documents or analysis outputs to train AI models. Your FDD content is processed solely for the purpose of generating your analysis and is not incorporated into any machine learning training dataset.

8. How to Report Errors

If you identify an error in AI-generated analysis — including incorrect data extraction, misinterpreted provisions, or unsupported statements — please report it. Error reports help us improve accuracy for everyone.

• Email: support@franvantage.com — Include the document name, the specific finding or data point in question, and the correct information from the source FDD if available.
• In-App: Use the Flag button available on any finding within the analysis interface to report an issue directly.

9. Contact

For questions about this AI Disclaimer or the use of artificial intelligence in our Service, contact us at support@franvantage.com.