1851

Before signing on the dotted line with a franchise, it is imperative to do the proper <a href="https://1851franchise.com/how-to-perform-due-diligence-on-a-brand-that-doesnt-have-franchisees-2375">due diligence</a>, which means conducting the research required to get a full understanding of the brand and the franchise requirements.The first step should be carefully reading the <a href="https://1851franchise.com/10-must-ask-questions-about-franchise-agreements-2708306">franchise agreement</a> in its entirety to ensure you know what you would be getting into. Assessing the initial investment and financial obligations and comparing those to your personal financial liability and resources is also an integral part of the due diligence process.&nbsp;In terms of reading the FDD, it’s important to review and understand the unit economics of the franchise — <a href="https://1851franchise.com/how-to-read-an-item-19-3200">Item 19</a>. Also, make sure to really dig into the costs that will be associated with joining the brand — <a href="https://1851franchise.com/the-most-important-items-in-an-fdd-item-7-initial-costs-2712071">Item 7</a>. Check out data relating to franchise growth in <a href="https://1851franchise.com/the-most-important-items-in-an-fdd-item-20---outlet-transfer-and-franchise-owner-information-2712074">Item 20</a> to gauge the scalability of the business, and ask questions if there is any litigation listed in <a href="https://1851franchise.com/understanding-item-3-of-the-franchise-disclosure-document-litigation-history-2703061">Item 3</a> of the FDD.Next, speak to at least 10 established franchisees for <a href="https://1851franchise.com/what-is-the-value-of-franchisee-validation-in-the-franchise-sales-process-2703208">validation</a> — franchisors might have a list of recommended franchisees to speak to, but break out of the habit of only contacting these individuals to ensure you get the real scoop.If possible, meet the <a href="https://1851franchise.com/the-importance-of-a-strong-leadership-team-972">leadership team</a> and learn about the company’s vision and business philosophy. Whether it is during a <a href="https://1851franchise.com/how-to-make-the-most-of-a-franchise-discovery-day-2714732">discovery day</a> or separate phone call, try to find out where the brand and industry are going and how they plan on staying relevant. You also want to look for a brand that has the capital to continue supporting the franchise system, and reading the footnotes of the company’s audited financial statement is where you will get that insight.Throughout all of these steps, especially when it comes to reviewing complex documents like the FDD and franchise agreement, make sure to seek out the help of a qualified <a href="https://1851franchise.com/franchisebrokerawards">franchise broker</a> or <a href="https://1851franchise.com/2020s-top-franchise-legal-players-2713623">franchise attorney</a>. When contemplating buying into a franchise system, franchise professionals can be an essential resource as they are experts in the industry and know the ins and outs of evaluating a franchise.

How Do You Do Due Diligence on a Franchise?

1851 Franchise

Performing due diligence on a franchise opportunity includes looking over the Franchise Disclosure Document, talking to advisors, meeting the leadership team, seeking franchisee validation and more.

how-do-you-do-due-diligence-on-a-franchise

Comfort Keepers

Comfort Keepers - Midyear Press Release 2025 - 1851 Franchise

Comfort Keepers® Hits Mid-Year Stride With Strong Franchise Growth and Rising Demand for In-Home Care

comfort-keepers-franchise-midyear-momentum-2025

petbar

petbar - Garrett Dewan - Why I'm Investing - 1851 Franchise

Why Garrett Dewan Is Choosing To Reinvest in petbar

petbar-franchise-austin-garrett-dewan-multi-unit

Paris Baguette

NJBIZ: Paris Baguette Ramps Up Expansion With New Franchises, Facility and 2030 Growth Target

njbiz-paris-baguette-ramps-up-expansion-with-new-franchises-facility-and-2030-growth-target

Busy Bee Jumpers

Top 10 Reasons To Buy a Busy Bee Jumpers Franchise in 2025

top-10-reasons-to-buy-a-busy-bee-jumpers-franchise-in-2025

Home Halo

home-halo-former-athletes-frachisees-image

Why Former College Athletes Can Make Winning Home Halo Franchise Owners

former-college-athletes-home-halo-franchise

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Wendy's CEO Kirk Tanner Steps Down - Breaking News - 1851 Franchise

Wendy’s CEO Kirk Tanner Steps Down Amid Challenges, Leaving Franchisees Facing Uncertainty

wendys-ceo-transition-kirk-tanner-franchisee-uncertainty

"Come in, We're OPEN" sign against abstract background

Small Business Optimism Dips, Raising Concerns for Franchise Owners

small-business-optimism-dips-raising-concerns-for-franchise-owners

Photo of Roof Scientist truck and trailer

Roof Scientist Expands Into Northern Indianapolis as Entrepreneur Dale Speckman Launches New Business in Fishers

roof-scientist-expands-into-northern-indianapolis

Image of Donald Trump pointing with red stripes in the background

August 1 Tariff Deadline Is Said to Have ‘No Extensions’: What This Could Mean for Franchises

august-1-tariff-deadline-franchise-impact

What June’s Jobs Report Means for the Franchise Industry

what-junes-jobs-report-means-for-the-franchise-industry

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

From Corporate Careers to Community Roots: Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

kansas-couple-opens-childrens-lighthouse-gardner-olathe

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery 

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery in Overland Park, Kansas

paris-baguette-franchise-overland-park-khandelwal

Blending Tech, Hospitality and Health Care: How Three Women From Different Worlds Came Together to Build a Paris Baguette Franchise

paris-baguette-franchise-flower-mound-texas

How Do You Do Due Diligence on a Franchise?

MORE STORIES LIKE THIS