1851

Like any employer-employee relationship, the one between franchisee and franchisor should involve compromise, communication and transparency. But before sealing the deal with a franchisor, it&#8217;s important that franchisees conduct due diligence on a brand. While chatting with existing franchisees is the gateway to genuine, authentic opinions, that luxury is not always available. Here are some tips on performing due diligence on a brand that doesn&#8217;t have franchisees. Take stock in your liability. Many franchisees do not realize that they are subject to what&#8217;s called &#8220;vicarious liability,&#8221; which is taken on by a franchisor due to the acts of a franchisee. Reviewing the circumstances and frequency against your franchisor will provide you with a crucial impression of what&#8217;s to come in this business relationship. Assessing your personal financial liability and resources is also an integral part of the due diligence process. Assess yourself. Honestly ask yourself if you&#8217;re ready to take the plunge into franchising. Do you have the transferrable skills that will make you an asset to the company? Are you willing to pick up new skills? Being a franchisee takes time and dedication; no matter how great the brand is, your unit will fail without these traits. Ask the franchisor. If you have no pool of franchisees to source opinions from, then contacting the franchisor is integral in the due diligence process. Asking about plans for the future, growth potential for the brand&#8217;s concept and franchisee recruitment plans are all pieces of information that you are entitled to. Remember, becoming a franchisee is as much of a financial investment for you as it is an ideological investment for the franchisor&#8212;make sure that you&#8217;re both ready to commit. Read the FDD more than once&#8212;and ACTUALLY read it. The Franchise Disclosure Document will explain many of the tiny moving parts that make a franchise run. From learning about the financial commitment to outlines about the brand&#8217;s expenditures, these are important things to know. One section of the FDD&#8212;the Item 19&#8212;is particularly crucial. &#8220;Review the Item 19 particularly closely,&#8221; Steve Beagleman of SMB Franchise Advisors said. &#8220;That section provides critical details on earnings, costs and other factors that could affect your future financial performance and your earnings potential.&#8221; Consult experts. Another crucial lifeline for prospective franchisees is franchise industry experts, from CEOs to attorneys to franchisees in similar industries. Allowing an industry professional to review your documentation and research will afford a much-needed perspective and will hopefully yield some insight. Encourage experts to play devil&#8217;s advocate and help you examine the franchise from every objective vantage point.

1851 Franchise

What if a major aspect of performing due diligence—input from current franchisees—isn't an option?

This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

How to Perform Due Diligence on a Brand that Doesn’t have Franchisees  

how-to-perform-due-diligence-on-a-brand-that-doesnt-have-franchisees

Children's Lighthouse

How Children’s Lighthouse Stands Out Among Other Children’s Education, Childcare, and Daycare Franchises

how-childrens-lighthouse-stands-out-among-other-childrens-education-childcare-and-daycare-franchises

The Growth Coach

The Growth Coach Franchise Costs, Fees, Profit and Data for 2025

the-growth-coach-franchise-costs-fees-profit-and-data-for-2025

One Hour Heating and Air Conditioning

Why One Hour Heating & Air Conditioning Sees People as the Power Behind Franchise Growth

one-hour-heating-air-conditioning-franchise-growth

Lawn Doctor

Design with photo of John Perry and Lawn Doctor logo

How a 20-Year Industry Veteran Tripled His Sales With a Lawn Doctor Franchise

lawn-doctor-franchise-success-story-john-perry

Fitness Premier

The Secret to Fitness Franchise Success? It's Not Just the Workouts

fitness-premier-franchise-marketing-support

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

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities - 1851 Franchise Agg

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities 

health-care-hiring-slowdown-in-home-care-franchise-opportunities

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

Potbelly to be Acquired by RaceTrac in $566 Million Deal 

racetrac-acquires-potbelly-in-566-million-deal

Power Eats: Smoothie King Rolls Out Food Nationwide To Fuel Franchise Growth

smoothie-king-food-menu-power-eats

How to Perform Due Diligence on a Brand that Doesn’t have Franchisees

MORE STORIES LIKE THIS