The franchise disclosure documents coupled with the franchise brochure or prospectus is the basic starting point for analyzing and understanding your franchise offering.  You need to study your documents in great detail. Write down on a sheet of paper the strengths and weaknesses of each area of the Uniform Franchise Offering Circular. Write down the obligations which the franchisees have running the franchise business. List the payments which they must make on a continuous basis. List the conditions for renewal and/or transfer of ownership to one of their family members or other persons.

There are still many questions which you need to ask relative to franchising opportunities.  How much profit will the franchisee make? One of the questions which is generally not listed in the UFOC is how much profit can the franchisee make." The disclosure rule prohibits franchisors from making unfounded and unsubstantiated claims of profits or sales. If any reference is made to sales, income or profit, then the franchisor must provide an earnings claim to the franchisee in item 19. Most franchisors do not provide any actual average or projected sales profits or earnings.

How do franchisees get information about earnings? Ask other franchisees. Many franchisees are willing to discuss their businesses with prospective franchisees if they know the individual is a serious potential franchisee. You must realize that this is often an uncomfortable subject and some franchisees will be reluctant to discuss it with potential franchisees.  

Additionally, franchisees may seek information from you, the franchisor, about establishing or starting a second, third, or fourth franchise unit. Is it possible to become a multi-unit franchisee? What are the requirements and limitations of becoming a multi-unit franchisee?

Additional questions which may be asked:

Does there exist a franchisee owner's association?

Are major disputes handled through mediation, arbitration, or the court system?

How long are the work days?

Do other franchisees take vacations?

Can the family help operate the franchisee business?

Are sales patterns seasonal?

Is there a strong demand for the product or service?

Does this business have a strong future?