Ask the franchisor how new owners actually do in their first years, how many owners have left and why, and how your territory would be defined. Then ask current owners whether they would make the same decision again. Speak with at least three owners per brand, including at least one who has been open for less than two years.
These are the same questions Mike Laufer, Certified Franchise Consultant and founder of Hook Alliance, puts in front of FranchiseHook candidates once they have chosen the brands they want to look at closely.
Who should you ask, and what can each one tell you?
Each source answers a different part of the decision. Use them together.
| Who you ask | What they can tell you | How to check it |
|---|---|---|
| The franchisor's development team | The model, the support and the kind of owner they look for | The FDD and your validation calls |
| Operations, marketing and training leaders | How the business runs day to day | Current owners |
| The Franchise Disclosure Document | Fees, investment, territory, performance data where provided, openings and closures | Your franchise attorney |
| Lenders | Financing structure, equity contribution and cash needed at closing | Your financial advisor |
| Current owners | What it is really like to run, and whether the franchisor's story holds up | More owners, including newer ones |
What should you ask the franchisor?
Ask every franchisor the same six questions, so their answers can be compared:
- How long does it typically take a new owner to break even, and when do most start paying themselves? This shows how long your savings need to last.
- What does a normal week look like for an owner in year one compared with year three? The first year and the third year are often very different jobs.
- How many owners left the system during the last three years, and why? Compare the answer with Item 20 of the FDD.
- Which territories are available in my target market, and how is territory size defined? Your area has to be open before anything else matters.
- What do successful owners have in common, and where do struggling owners typically fall short? This tells you who the brand is built for.
- Which lenders do you prefer, and what equity contribution are buyers with a similar profile making? This tests whether your funding plan is realistic.
Franchisors can generally share financial performance figures only through Item 19 of their FDD. If a development team points you there when you ask about break-even, that is the rule they work under, and it tells you where to look next.
What should you ask current owners?
Validation is where you find out whether the franchisor's story holds up in practice. Ask each owner the same five questions:
- If you could make the decision again, would you buy this franchise?
- How close was your first year to what the franchisor led you to expect?
- How many hours are you working now, and can you take a real vacation?
- What is the hardest part of the business that nobody warned you about?
- How responsive is the corporate team when you need help?
Listen for patterns across owners more than any single answer. One unhappy owner may have a story of their own, while three owners describing the same problem point to something worth raising with the franchisor.
Why call at least one newer owner?
An owner who opened recently remembers the first year clearly: training, launch, and how close the early months came to what they expected. A long-standing owner can tell you what the business becomes over time, and you want both perspectives before you decide.
Item 20 of the FDD includes contact details for current franchisees, so you can choose some of the owners you call yourself, alongside any the franchisor suggests.
What happens at Discovery Day?
Discovery Day usually comes near the end. You meet the leadership team, tour operations and confirm the fit before you make any commitment. It works in both directions, because the franchisor is also deciding whether you fit the system.
Bring the questions your FDD review and validation calls left open. By then you should know which answers you still need, and Discovery Day is the right room to ask for them.
How does FranchiseHook help with these conversations?
We start with a questionnaire and a discovery conversation about your goals, budget, involvement and geography. From there we present a focused set of brands that fit, drawn from more than 600 franchise brands through IFPG, and make direct introductions to the franchisors you want to meet. We help you prepare for each step. The decision stays with you and your own advisors.
Frequently asked questions
How many owners should I talk to?
At least three per brand, including at least one who has been open for less than two years. More is better if the answers are mixed.
Should I ask owners about money?
Yes, though owners decide what they are comfortable sharing. Their sense of how the first year compared with expectations is often the most useful answer.
What if the franchisor and the owners tell different stories?
Take that seriously. Ask the franchisor about the difference directly, and raise it with your franchise attorney before you go further.
Does FranchiseHook charge me for any of this?
No. FranchiseHook is 100% free to you. Franchisors cover our fee.
This article is general information, not legal or financial advice. Review any FDD and franchise agreement with a franchise attorney and financial advisor before investing.
Ready to start? Begin with the franchise questionnaire or book a call.