Visit at least one franchised location. When meeting with the franchisees, observe their operation, discuss expenses and ask about franchisor support. Reputation, stability and financial strength of the franchisor are critical. Check with the local chamber of commerce or Better Business Bureau to determine these attributes. Examine the franchisor's attitude toward you.
Compare sales promises with existing historical documentation.
Be certain that the sales presentation is realistic and that promises are written into the contract. Be alert for exaggerated claims and pressure tactics. Verify earnings claims and compare them with other business opportunities. Determine what royalty, training or cooperative advertising cost will be required. The Federal Trade Commission requires the franchise seller to provide prospective investors with specific, complete and accurate information along with documentation of all earnings.