The One Step Most First-Time Franchisees Skip (That We Learned the Hard Way)

Franchising seems like a reliable way to start a business. The brand is established. The systems are in place. The customers are ready.

But one step separates those who succeed from those who struggle. Talking to existing franchisees before signing anything.

The Cost of Skipping Due Diligence

Erica and I have been in franchising for over 20 years. We have owned six brands across three industries. Some required hundreds of employees. Others operated with only a few. Some franchisors provided strong support. Others left us to figure it out.

One investment stands out as a reminder of what happens when you do not ask enough questions.

We invested in a beauty concept that looked promising. The branding was polished, and the financial projections were appealing. We spoke to a few franchisees and moved forward, confident in our ability to make it work.

What we didn’t do was dig deeper.

We overlooked operational challenges that weren’t obvious at first. We didn’t realize how much the business depended on hiring the right specialists. We underestimated the complexity of managing inventory and customer expectations.

Had we spoken to more franchisees, we would have asked better questions and been better prepared.

How to Get the Real Story Before You Buy

If you are considering a franchise, take these four steps before making a decision. Each step includes an action item you can execute.

Step 1: Find Franchisees Who Will Give You the Unfiltered Truth

Most new franchise buyers only speak with the contacts provided by the franchisor. That list will often include franchisees who are doing well or who will paint the brand in a positive light.

To get a full picture:

? Search online for franchise owners in your area. Look at LinkedIn, Google, and business directories. Contact those who aren’t on the franchisor’s official list.

? Call at least five franchise owners - a mix of top performers and those who seem less active.

? Visit a franchise location in person. See how it operates and talk to the owner or staff.

?? To-do: Create a contact list of 10 franchisees to reach out to. Track responses and schedule calls.

Step 2: Ask the Right Questions

Many franchise buyers focus on the financials, but the daily reality of running the business is just as important. When speaking with franchisees, ask:

• What do you wish you had known before starting?
• What is the biggest challenge no one talks about?
• How long did it take to break even?
• How involved is the franchisor in daily operations?
• Would you buy in again?

?? To-do: Download and print a Franchisee Interview Worksheet with these questions and space for notes. Use it to organize feedback from each conversation.

Step 3: Cross-Check Answers and Look for Patterns

If multiple franchisees bring up the same challenge, take note. That issue is likely real, not just one person’s experience.

To organize the information:

? Create a simple spreadsheet with franchisee names, locations, and responses to key questions.

? Compare their answers to identify patterns—do many owners struggle with hiring? Are customers harder to attract than expected?

? Write a summary of the biggest pros and cons you found from your research.

?? To-do: Summarize key takeaways in one page. This will help you compare what franchisees say with what the franchisor is telling you.

Step 4: Talk to Former Franchisees

Current franchisees may hesitate to share negative experiences. Former franchisees, however, have no reason to hold back.

To get this perspective:

? Search for franchisees who sold or left the business. Look at LinkedIn and local business groups.

? Ask why they exited. Were there financial issues, operational challenges, or lack of support?

? Compare their answers with what current franchisees are saying.

?? To-do: Write down three reasons franchisees have left. If their concerns match what active franchisees struggle with, rethink your decision.

Franchising Requires a Long-Term Strategy

Industries evolve. Business models change. Many first-time franchisees assume they will run the business for decades, but that is not always the case.

Some franchise owners focus on growth and expansion. Others plan for an exit within a few years. Knowing your approach before you invest will help you make better decisions.

Making a business investment requires careful research.?

If you want a second opinion before making a commitment, schedule a consultation.

?? Book a free introductory call here.

Taking the time to ask the right questions now can help you make a more informed decision.