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How Do I Do Proper Due Diligence With Franchises?


It's so important to get good information from existing franchisees. They may be your best source of real information, so you have to have a good approach. You need to introduce yourself. You need to perhaps not visit somebody in your area that you may end up competing against. You want to start with general questions, and work to more specific. I think building a real relationship allows people to be a little bit more forthcoming.


So some of the questions, as you develop a relationship, might be, "Have you had any surprises along the way? What was your training experience like? Were you satisfied? How are things with the franchisor? How do they treat you?" And one that is, I think, really important, is to say, "Are you planning to do another one? And if not, why not?" But spend the time, and develop a good relationship with franchisees. They can be a wealth of information for you.

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