The starting point for analyzing a franchise offering is to obtain the offering circular. There is a federal offering circular format suggested by the Federal Trade Commission. However, there is no federal registration requirement, so each franchisor may not have this offering circular.
Many states require a similar document.
You should check on several things. Ask your accountant to review the franchisor s financial statements to determine if it is strong enough to supply the level of support it is promising. In fact, ask the franchisor for the names and phone numbers of several people who are unhappy or have left. You should be conscious of the fact that there is still very little regulation of franchisors. An offering circular does not indicate any government approval or even scrutiny of the opportunity.