A franchise can provide a recognised brand and operating system, but it also creates obligations and ongoing costs. Due diligence should test the commercial case as well as the contract.
Start with the requirements
Request the full fee schedule, expected setup costs, recurring royalties, marketing contributions, territory rules, supplier restrictions and renewal terms. Speak with existing franchisees where possible and ask about actual operating costs, training, support quality and the time needed to reach stable operations.
Build a repeatable process
Build a conservative financial model that includes rent, staffing, utilities, stock, licensing, marketing and working capital. Review assumptions against independent evidence rather than relying only on projected sales. Have a qualified lawyer review termination, dispute, exclusivity and transfer provisions before signing.
Check the latest guidance
Franchise rules and contract protections depend on the arrangement and applicable law. Obtain independent legal, accounting and licensing advice before committing funds.
