When you buy a franchise, your decision to move forward is largely based upon information provided by the franchisor. From marketing materials and sales pitches to the Franchise Disclosure Document (FDD) and franchise agreement, while you may receive information in multiple formats, all of these formats trace back to the same single source.
Hopefully, the information you receive is up-to-date and not misleading. Hopefully, your franchisor is confident in its offering and wants you to make as informed of a decision as possible. Unfortunately, this is not always the case. As a result, it is important for both prospective and current franchisees to seek to verify their franchisors’ representations through other sources, whether that means going online, sending an email or picking up the phone.
Where to Find Information About Franchisors and Franchise Opportunities
If you need to find information about your franchisor or a franchise you are considering purchasing, these sources are a good place to start:
1. Current Franchisees
Franchisors are required to disclose their current franchisees’ addresses and phone numbers in Item 20 of the FDD. If you have questions, there is a good chance that other franchisees in the system have either had the same question before or turned to other franchisees for help in other circumstances. As a result, you will often find that existing franchisees are more than happy to share what they know.
2. Former Franchisees
The mandatory disclosures in Item 20 also include addresses and telephone numbers for franchisees who have left the system within the past year. While some active franchisees will be hesitant to share negative information about their franchisor, former franchisees typically do not have the same concerns.
3. The Franchisor’s Current (or Former) FDD
If you are curious whether the franchisor is meeting its targets and projections, looking at past versions of the FDD can provide a wealth of valuable information. If you are curious about changes or new requirements, consider comparing your copy of the FDD to the latest version.
4. Online Forums and Social Media
In large franchise systems, many franchisees participate online forums where they can ask questions and offer advice. Some of these forums are available to the public, and they can provide valuable insights for prospective franchisees.
5. Franchisee Groups and Associations
Franchisee groups and associations exist to express and address franchisees’ shared concerns. Members are often willing to talk with franchise candidates, and becoming a member can provide access to a wealth of shared resources and information.
6. Franchise Consultants
Franchise consultants are independent professionals who advise prospective and active franchisees on everything from comparing franchise opportunities to growing a sustainable business. While some franchise consultants have more experience and credentials than others, if you find a good franchise consultant, he or she can help you make an informed decision.
7. Franchise Attorneys
Lastly, if you have questions with legal implications, you can seek advice from an experienced franchise attorney. An experienced franchise attorney will be knowledgeable about specific franchise systems, the franchise industry in general and the legal pitfalls involved in franchise ownership.
Speak With a Franchise Attorney at the Goldstein Law Firm
If you have questions and would like to speak with a franchise attorney, you can contact the Goldstein Law Firm for a free consultation. We serve prospective and active franchisees nationwide; and, with over 30 years of experience, we have represented franchisees in virtually all major franchise systems. To schedule an appointment with franchise attorney Jeffrey M. Goldstein, please call (202) 293-3947 or submit our online request form today.
