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Franchisor Research Question Checklist

It is important to thoroughly understand all legal documents prior to signing them. This is a list of questions commonly asked by franchisees during the selection process, but should not substitute for competent legal counsel. Each opportunity is unique and not all of the items may be applicable. Likewise, there will be other items and issues that you will want to address for your specific circumstances.

Top 20
  • Request the Uniform Franchise Offering Circular (UFOC) or other legal documents
  • Perform background checks on key management
  • Request credit check of the company
  • Research existing and past lawsuits involving company and key management
  • Talk with current and former franchisees (see questionnaires)
  • Research what year the company was founded
  • Research the number of units opened (total)
  • Research number of units closed (total, last year, last 2 years)
  • Research the experience level of the executive team
  • Confirm projections in item 7 of UFOC with existing franchisees (eg: professional fees, build out, working capital, advertising/marketing introduction)
  • Research where initial training is held, how long it lasts, how many people must attend, and additional costs, if any
  • Inquire about corporate support available for pre-opening, grand opening, and initial weeks of business
  • Inquire about level of guaranteed field support
  • Inquire to see if the franchisor aids in location selection and whether they have the final authority to approve/reject a site
  • Inquire about whether or not the company offers financing options and what is the typical amount financed
  • Research average unit sales in first two years, systemwide, and how AUV changed this year compared to last
  • Inquire about the number of full time staff dedicated to field support and the number of units each
  • Inquire about how often staff visits the location, their purpose (audit, store review, marketing assistance, compliance, training, P&L review)
  • Discuss projected number of openings in the next 12 and 24 months and the markets into which these units will open
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