At the very least, the franchiser must provide you with the names of 10 franchises in your prospective market area. When you meet with the franchisees, observe their operation, discuss expenses and ask how well the franchiser supports the franchise units. You should determine the reputation, stability and financial strength of the franchiser. Check the franchiser's financial statements in the disclosure document. If the franchisees are paying their upfront fees but not their royalties, this may indicate that franchise units are being sold to investors but that they fail to open or perform too poorly to pay royalties.
Compare sales promises with existing documentation.
Be certain that the sales presentation is realistic and that major promises are clearly written into the contract. Be alert for exaggerated claims and pressure tactics. For newly established franchises, make sure the franchiser has registered the company's trademark. If not, the company's name and logo may have to be altered, forcing you to change your market identity after you have established yourself. Verify earnings claims and compare them with other business opportunities.