When meeting with the franchisees observe their operation, discuss expenses and ask about franchiser support. Determine the reputation, stability and financial strength of the franchiser. Examine the franchiser's attitude toward you. Check the disclosure document carefully. If the franchisees are paying their up front fees but to their royalties, this may indicate that franchise units are being sold to investors who 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 promises are written into the contract. Be alert for exaggerated claims and pressure tactics. 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.