May 29, 2026

Last month, we published an article outlining seven reasons franchisees should be cautious about using artificial intelligence (AI) when researching franchise opportunities. In that article, franchise attorney Jeffrey M. Goldstein highlighted some of the key pitfalls of using AI for research purposes, particularly when researching anything with significant financial or legal implications (or both).

Jan 13, 2021

Attending large franchise conventions and visiting the franchisor’s headquarters are two hallmarks of the franchise due diligence process. They are also two events that have largely been put on hold during the COVID-19 era. But, franchisors are still selling – and franchisees are still buying – and those who are thinking about buying a franchise must still perform thorough due diligence in order to make an informed buying decision.

Feb 12, 2018

If you flip through a typical Franchise Disclosure Document (FDD), most of what you will find is page after page of small, dense text that was clearly written by an attorney. However, things change (briefly) when you get to Item 20. In Item 20, franchisors are required to produce a series of five standardized tables that provide historical information, current information and future projections about the size and growth of the franchise system. Carefully reviewing the data in Item 20 can tell you a lot about a franchise system. Has it grown consistently over the past three years? Have franchisees been leaving the system on a regular basis? Is the franchisor focused on expanding through franchising or company-owned outlets? You can gain insight into these issues and more through Item 20 of the FDD. Breaking Down Item 20 of the Franchise Disclosure Document (FDD) 1. Systemwide Outlet Summary The first table in Item 20 is labeled, “Systemwide Outlet Summary,” and it simply compiles data from tables three and four.  Here you will find: The total size of the franchise system (including franchised and company-owned outlets) The net change in franchised outlets for each of the past three years The net change in company-owned outlets for each of the past three years All of this information is important for assessing the health of the franchise system as a whole, and the later tables provide information that is specific to your state. 2. Transfers of Outlets from Franchisees to New Owners (other […]

Jul 21, 2017

In a previous article, we highlighted the importance of asking questions during the due diligence process, and we discussed four types of issues that demonstrate why franchisees should not rely on franchisors’ Franchise Disclosure Documents (FDDs) and marketing materials alone. We also mentioned the importance of talking to both current and former franchisees. This article covers some basic tips and questions to ask when contacting current and former franchise owners. How to Find Current and Former Franchisees But, before we get ahead of ourselves, how do you contact current and former franchisees? Fortunately, the requirements of Item 20 of the Franchise Disclosure Document (FDD) make this simple. In Item 20, franchisors must disclose contact information for: Current franchisees, Franchisees who have left the system within the past year, and Franchisees who have not communicated with the franchisor within the past 10 weeks. When contacting these individuals, keep in mind that they may have additional references as well. They may have an older version of the FDD that they are willing to share; or, they may know of other current or former franchisees who can impart particularly-valuable information. Questions to Ask Current and Former Franchisees During Due Diligence Once you start reaching out to current and former franchisees, what types of questions should you ask them? Here are some general recommendations: 10 Questions for Current Franchisees Has the franchise opportunity met your expectations? In what ways is operating your franchise different from what you expected? Are you consistently able to meet […]

Nov 1, 2016

When considering a franchise opportunity, it is critical to conduct your due diligence. Buying a franchise is a substantial, long-term investment, and your success or failure will hinge in large part on the actions, omissions and obligations of your franchisor. Franchise due diligence is an involved process that takes time, effort and a commitment to finding real answers instead of simply trying to validate your interest in the franchise. The following is a list of 10 examples of steps prospective franchisees can take to learn more about their potential franchise opportunities: Franchise Due Diligence: 10 Steps 1. Talk to Current Franchisees. How are their businesses doing? How long did it take them to become profitable? How supportive is the franchisor? Current franchisees can provide invaluable information to help you decide whether to pursue a particular franchise opportunity. 2. Talk to Former Franchisees. Former franchisees are a key source of information as well. Why did they leave the system? Would they do it again if they had the chance? What is their opinion of the franchisor? 3. Visit the Franchisor’s Headquarters or Company-Owned Location. The in-person visit is an important step in the due diligence process. You will want to meet the franchisor’s key personnel in person, and see if you think you will be a good fit for the way they do business. You should also try to visit several franchised locations. 4. Review the Franchisor’s Franchise Agreement and FDD. While you should hire an attorney to review the franchisor’s […]

Apr 23, 2026

While it is becoming increasingly common to use ChatGPT, Gemini, Perplexity, and other artificial intelligence (AI) platforms to conduct research rather than searching online, this approach poses several risks. This is especially true for prospective franchisees. As a prospective franchisee, it is critical to do your due diligence, and there are multiple issues with AI that make it unfit for this purpose. Keep reading to learn more from franchisee lawyer Jeffrey M. Goldstein.

Mar 20, 2026

The Franchise Times recently released its list of the “10 Top Brands to Buy” in 2026 as part of its annual Zor Awards. Several publications release these types of lists, and, as a prospective franchisee, it is important to make informed decisions about how much weight, if any, to give to a franchisor’s inclusion on (or exclusion from) any particular list of the “top” or “best” franchise brands. Keep reading for some important insights from national franchise attorney Jeffrey M. Goldstein.

Mar 13, 2026

Experiential franchises have seen a surge in popularity in recent years. With many brands benefiting from a post-pandemic rebound and a growing desire to find ways to engage “IRL” that do not involve screen time, several franchises in this sector have reported strong sales and are actively recruiting new franchisees. Does this mean that now is a good time to buy? Here are some key considerations from national franchise lawyer Jeffrey M. Goldstein.

Feb 20, 2026

As we do every year, we are seeing several new franchise concepts vying for prospective franchisees’ attention in 2026. These include social gaming and boutique fitness franchises, among others. If you are thinking about buying a franchise, should you consider a new concept in one of these trending industries? Here are some key considerations from national franchise lawyer Jeffrey M. Goldstein.

Jan 23, 2026

The Franchise Times recently released its “Fast & Serious” list for 2026. According to the publication, this list ranks the “fast-growing franchise systems that also have staying power, as an antidote to multiple other rankings that include too many one-year wonders.” Here are some insights on the list from national franchise lawyer Jeffrey M. Goldstein.