1

Talk to and visit franchisees.

Be sure to ask tough questions. Don't just shoot the breeze. Also visit franchisees at their stores. You get more information and it is an opportunity to see the franchise in operation.

2

Review the Franchise Disclosure Document (FDD) Carefully

The FDD lists a great deal of information but many franchisees do not even give it a glance. The FDD will contain information about lawsuits, revenues and management.

3

Research on the Internet

Are there any gripe sites? See UPS Store www.thebrownboard.com and Quiznos www.toastedsubs.info as examples of gripe sites. Go to www.unhappyfranchisee.com to see if there is any information about the franchisor on the site. Be sure to take what you read on the Internet with a grain of salt and verify what you learn.

4

Talk with Management in Depth

Ask the tough questions of management. One expert recommends that you ask the franchisor whether they will let you out of their franchise agreement if you are unhappy? If they respond "Yes", they are lying and will say anthing to get you to sign. (Franchise agreements are enforceable contracts and I have yet to deal with a franchisor that will let you out of an agreement voluntarily).

5

Know Your Market

Do the market research and understand how the franchise fits into the competitive picture. Also, think about how the market is going to change. Franchise profitability may vary from region to region.

6

Get Advice

Have an accountant review the franchisor's financials and have an attorney review the FDD and the franchise agreement.