You’ve Already Taken the First Step
If you’re reading this article, you’ve already done what most future franchise owners do first — you’ve requested information from one or more franchise opportunities.
Over the next few days, you’ll likely receive calls, texts, and emails from franchise consultants and brand representatives. Take those conversations.
Your goal isn’t to buy a franchise this week. Your goal is to gather enough information to determine which opportunities deserve further consideration. The candidates who make the best franchise decisions are the ones who treat the early conversations as research, not commitment.
This guide walks you through what to ask, what to listen for, and how to evaluate what you hear.
Why Answering the Call Matters
Many smartphones now automatically screen calls from unfamiliar numbers. Voicemails get missed. Text messages from unknown senders get ignored. That’s a real problem if you’ve requested franchise information and the people with the answers can’t reach you.
Watch for calls, texts, and emails over the next few days from franchise consultants and brand representatives. When they reach out, save their contact information so their future communications come through clearly. A consultant who can’t reach you can’t help you evaluate the opportunities you asked about.
If you miss a call, return it. The conversations early in the process are when you have the most leverage to ask questions before pressure builds.
Prepare for the First Call
The first conversation with a franchise consultant or brand representative is usually informal. They want to understand your situation. You want to understand the opportunity. Both sides are evaluating fit.
Before the call, think through your own situation:
- How much can you comfortably invest, and how much liquid capital do you have available?
- What income are you trying to replace or build?
- Are you looking to be an owner-operator running the business yourself, or a semi-absentee owner managing a team?
- What industries genuinely interest you, and which would you rather avoid?
- How quickly are you looking to move — within months, within a year, or just researching for the future?
Coming to the first call with clarity on these questions transforms the conversation. You’re not just receiving information. You’re filtering it against your own criteria. The consultant or representative gets a better-prepared candidate, and you get more useful answers.
Questions to Ask the Franchisor
Once you’ve engaged with a specific brand, certain questions should be on your list.
About the business itself:
When was the company founded, and how long has it been franchising? A franchisor with five years of franchising experience operates differently than one with thirty.
Who runs the company, and what are their backgrounds? Look for leadership with relevant industry experience, not just franchising experience.
How many franchise locations are currently operating? How many have opened in the past two years? How many have closed?
What qualities does the franchisor look for in a franchisee? The answer tells you whether your background fits.
About operations and support:
What initial training does the franchisor provide, and how long does it last?
What ongoing support is available after you open — operational, marketing, technology, supply chain?
Will you have a protected territory? How is it defined, and how is it protected from competing franchisees within the same brand?
What technology platforms does the franchisor provide or require? What do those platforms cost?
What’s the typical timeline from signing the franchise agreement to opening for business?
About financial expectations:
What’s the total estimated initial investment, including all fees, equipment, real estate, and working capital?
What ongoing fees apply — royalties, marketing fund contributions, technology fees, supply requirements?
What’s the typical timeline to profitability? Be skeptical of vague answers.
Does the franchisor offer financing assistance or established relationships with lenders?
Questions to Ask Existing Franchisees
Talking with current and former franchisees is one of the most valuable steps in your evaluation. The franchisor will provide a list of franchisee contacts in the Franchise Disclosure Document. Call several. Their answers reveal things the franchisor’s marketing materials won’t.
Useful questions for franchisees:
Why did you choose this franchise? If you were starting over, would you choose it again?
What did the franchisor get right about training and support? What did they get wrong?
How long did it take to reach profitability, and how does your current performance compare to what you expected when you signed?
What surprised you most about owning this franchise — positive or negative?
How responsive is the franchisor when you have problems? Do they listen to franchisee feedback?
What advice would you give someone considering joining this franchise system?
If you talk with five franchisees and most of them describe similar frustrations, that pattern is meaningful. If they describe similar successes, that’s also meaningful.
Using the Franchise Disclosure Document
Before you sign anything, the franchisor must provide a Franchise Disclosure Document — the FDD. This is a substantial document, often over 200 pages, that the Federal Trade Commission requires franchisors to provide to prospective franchisees.
Read it carefully. Some sections deserve particular attention:
Item 3: Litigation lists lawsuits the franchisor has been involved in. A pattern of franchisee lawsuits against the franchisor is a significant warning sign.
Item 7: Estimated Initial Investment breaks down what it actually costs to open the franchise. Compare these numbers to anything the franchisor has told you verbally. Discrepancies matter.
Item 19: Financial Performance Representations is one of the most important sections. Some franchisors include detailed revenue or profit data from existing units. Others include nothing. A franchisor who declines to provide Item 19 disclosures isn’t doing anything illegal, but the absence of financial data tells you something about how confident they are in their results.
Item 20: Outlets and Franchisee Information shows the number of franchised and company-owned locations, openings, closings, transfers, and terminations over the past three years. Look for trends. A system with growing closures or terminations year over year warrants questions.
Item 21: Financial Statements shows the franchisor’s audited financial health. A franchisor that’s losing money or carrying significant debt may not be able to provide the support they’re promising.
Consider having a franchise attorney review the FDD before you sign anything. The cost is modest relative to the investment, and a good attorney will catch issues that aren’t obvious to someone reading their first FDD.
Red Flags to Watch For
Some warning signs deserve serious attention during the evaluation process.
Evasive answers. If the franchisor or representative dodges specific questions, gives vague answers about financial performance, or won’t put commitments in writing, take that as data. Good franchisors answer questions directly.
Reluctance to connect you with franchisees. Strong franchisors want you to talk with their existing franchisees because those conversations build confidence. A franchisor who restricts access to franchisees or steers you only toward hand-picked references is hiding something.
Pressure to sign quickly. Phrases like “this territory won’t last” or “we have other interested candidates” are pressure tactics. A franchise commitment that lasts ten or twenty years should not be made under time pressure. Any legitimate opportunity will still be available after you’ve done proper due diligence.
Unrealistic income claims. Be especially careful when verbal claims about franchisee income don’t match what’s disclosed in Item 19. The FDD is the legal document. Verbal claims that go beyond it are warning signs.
Significant differences between marketing materials and FDD disclosures. If the brochure shows one investment range and the FDD shows another, the FDD is the truth. Investigate the discrepancy before proceeding.
Negative patterns from franchisees. When you call existing franchisees and several describe similar problems — slow franchisor response, missing support, marketing that doesn’t drive customers, equipment requirements that change without notice — that pattern is more reliable than any single conversation.
High closure or termination rates. Item 20 in the FDD shows how many locations have closed, been transferred, or been terminated. Compare those numbers to the total system size. A franchise system with high turnover has problems that aren’t being solved.
Pressure to use specific lenders or vendors. Some franchisors require franchisees to use specific suppliers or financing sources. That can be legitimate or it can be a way to extract additional fees beyond what’s disclosed. Ask whether the franchisor receives any compensation from these arrangements.
How to Make the Final Decision
The strongest franchise candidates approach the decision the same way:
They ask questions and take notes.
They compare opportunities across multiple brands rather than focusing on just one.
They speak with current franchisees — and ideally former franchisees — before signing.
They review the FDD carefully, with professional help when appropriate.
They make decisions based on facts rather than excitement.
The best franchise buyers don’t rush. They treat the evaluation period as the most important work of the entire process, because the decisions made before signing the franchise agreement determine everything that comes after.
That’s the process we encourage at America’s Best Franchises. The opportunities you’ll hear about over the coming days deserve thoughtful evaluation, not quick decisions. Take the time to ask, compare, and verify. The franchise you choose will be with you for years. Choose it carefully.
