15 essential questions to ask existing franchisees during validation calls. Learn what good and bad answers look like and red flags to watch for.
The Franchise Disclosure Document tells you what the franchisor is legally required to disclose. Validation calls with existing franchisees tell you what it is actually like to own and operate the business every day.
No amount of FDD analysis replaces talking to the people who are living it. Franchisees will tell you things the FDD cannot: whether the franchisor actually delivers on its support promises, whether the revenue projections are realistic, and whether they would make the same investment again if they could go back in time.
Every franchise advisor, franchise attorney, and experienced franchise consultant will tell you the same thing: the validation process is the single most important step in your due diligence. Skip it at your peril.
Item 20 of the FDD is required to include the name, business address, and telephone number of every franchisee currently operating in the system. For larger systems, this can be dozens or even hundreds of pages.
It also includes a separate list of franchisees who left the system (through termination, non-renewal, transfer, or ceased operations) in the most recent fiscal year, along with their last known contact information.
Do not just call the five people the franchise sales team recommends. Build your own call list:
Total target: 15-20 conversations. Yes, this is a lot of calls. You are about to invest $200,000 to $1,000,000 or more. The calls are worth it.
Question 1: “How does your actual revenue compare to what you expected before you opened?”
This is your opening question and it sets the tone for an honest conversation. You are asking whether the business performs as advertised.
Question 2: “How long did it take you to reach breakeven, and how long until you were taking a meaningful salary?”
The ramp-up period is where many franchisees struggle. Item 7 may estimate 3-6 months of working capital, but reality could be 12-18 months.
Question 3: “What is your approximate annual revenue and what do you take home after all expenses, royalties, and debt service?”
This is the question everyone wants to ask but many are too polite to. Just ask it directly. Most franchisees will give you at least a range.
Question 4: “Were there any significant costs that surprised you that were not well-represented in Item 7?”
This uncovers the hidden costs and underestimates that the FDD may not adequately convey.
Question 5: “If you could go back, would you make this investment again? Why or why not?”
The most revealing question you can ask. Listen not just to the yes or no, but to the enthusiasm (or hesitation) in their answer.
Question 6: “How would you rate the initial training program? Did it prepare you to run the business?”
Training quality varies enormously between franchise systems. Some provide excellent, hands-on training. Others offer a cursory overview that leaves you figuring things out on your own.
Question 7: “When you have a problem, how responsive is the franchisor? Can you give me a specific example?”
Asking for a specific example forces a concrete answer rather than a generic “they’re fine.” The specific story they tell will be very informative.
Question 8: “How has the franchisor’s support changed since you first opened?”
Franchisors tend to provide the most support during the opening phase. What happens after that is what defines the long-term relationship.
Question 9: “Do you feel the royalty and advertising fees provide good value for what you receive?”
This question gets at whether franchisees feel the ongoing fee relationship is fair. If franchisees consistently feel they are paying too much for too little, that is a systemic problem.
Question 10: “What does a typical week look like for you? How many hours do you work?”
Some franchises are truly owner-operated with 60-70 hour weeks. Others can be semi-absentee with a good manager. Understand what you are signing up for.
Question 11: “What is your biggest operational challenge right now?”
Every business has challenges. The question is whether those challenges are manageable or existential. Labor shortages, supply chain issues, and technology problems are common answers.
Question 12: “Have you experienced any territorial conflicts or encroachment from other franchise locations or corporate channels?”
This question directly addresses one of the most common sources of franchisor-franchisee conflict. If territory protection is weak, you will hear about it here.
Question 13: “How would you describe the culture among franchisees in this system? Is there a franchisee advisory council?”
A healthy franchisee community indicates good franchisor-franchisee relations. Franchisee advisory councils that actually influence decisions are a positive sign.
Question 14: “If you were buying today, what would you do differently?”
This surfaces practical wisdom that can save you money, time, and frustration. You may hear advice about location selection, staffing, initial marketing, or negotiating the lease.
Question 15: “Is there anything I haven’t asked that you think I should know?”
Always end with an open question. Some of the most important information comes out when you give people space to volunteer what is on their mind.
Here’s a reference table summarizing what you’re listening for across these conversations:
| Topic | Green Flag Answer | Red Flag Answer |
|---|---|---|
| Revenue vs. expectations | ”Close to or above what I expected" | "Significantly below projections” |
| Time to breakeven | ”6-12 months, as expected" | "Still not profitable after 18+ months” |
| Owner take-home pay | Willingly shares range; sounds satisfied | Evasive, vague, or openly frustrated |
| Surprise costs | ”A few minor things" | "Build-out was 40% over estimate” |
| Would invest again | Enthusiastic yes | Hesitation, qualifications, or outright no |
| Training quality | ”Thorough and practical" | "Barely adequate” or “learned by trial and error” |
| Franchisor responsiveness | Specific positive examples | ”I can never get anyone on the phone” |
| Support over time | ”Consistent” or “has improved" | "Dropped off after I opened” |
| Fee value | ”Fair for what I get" | "I feel like I’m just paying a tax” |
| Work hours | Matches your expectations | Far more demanding than advertised |
| Biggest challenge | Manageable operational issues | Fundamental business model problems |
| Territory issues | ”No problems” | Active encroachment complaints |
| Franchisee culture | Collaborative, advisory council exists | Adversarial, no communication channels |
| What to do differently | Tactical advice (location, timing) | “I would not do it at all” |
Source: Data extracted from 2025-2026 Franchise Disclosure Documents filed with state regulators. Figures may have changed since filing. Verify current terms directly with the franchisor.
Certain patterns in franchisee responses should give you serious pause:
If you call 15 franchisees and 10 of them decline to speak with you or seem guarded and scripted, something is wrong. Happy franchisees are generally willing to talk.
If 6 out of 10 franchisees say revenue is below expectations, that is not bad luck. That is a systemic problem with the franchise’s earnings representations or sales process.
If more than 2-3 out of 10 franchisees say they would not make the investment again, walk away. These people have skin in the game and every incentive to be positive about their investment.
If you have trouble reaching franchisees because many of the Item 20 phone numbers are disconnected or the businesses have closed since the FDD was issued, the system has a churn problem the FDD data may not yet fully reflect.
If multiple franchisees give nearly identical answers that sound rehearsed, or if they tell you the franchisor asked them to “stay positive” with prospective buyers, the authenticity of the validation process is compromised.
Create a simple spreadsheet to track responses across all your calls. When you can see the data side by side, patterns emerge quickly.
Validation calls do not replace FDD analysis, and FDD analysis does not replace validation calls. You need both.
The FDD gives you the hard data: unit counts, closure rates, fee structures, financial statements, and litigation history. Validation calls give you the human story behind those numbers.
When the FDD data and the franchisee responses align, you can have reasonable confidence in your assessment. When they contradict each other, dig deeper.
Use our franchise library to start your FDD research, then take what you learn into your validation calls armed with specific, data-informed questions. The combination of AI-powered FDD analysis and thorough franchisee validation is the most effective due diligence approach available.
Start your research now and get the data you need before making your first call.
One specific question to push on during validation: “How much working capital did you actually burn through before you hit break-even, and how does that compare to what Item 7 disclosed?” The gap between the two is where most year-one cash crunches live. See franchise working capital: why $50K isn’t enough for the bottom-up math.
You should aim to speak with at least 10-15 current franchisees and 3-5 former franchisees. Speaking with a larger sample reduces the risk of getting a skewed perspective. Make sure to include franchisees from different regions, different tenure lengths, and both high-performing and average-performing locations.
Item 20 of the Franchise Disclosure Document is required to include the name, address, and phone number of every current franchisee in the system. It also lists franchisees who left the system in the past year. This is your primary source for validation contacts.
Most franchisees are willing to share their experience, especially if you are respectful of their time. Call during off-peak hours, introduce yourself as a prospective franchisee, and keep the initial conversation to 15-20 minutes. Some franchisees may decline, which is their right, but if a large number refuse to speak with you, that itself is a data point.
Absolutely not. Franchisors often provide a short list of their happiest, most successful franchisees as references. While you should speak with those people, you must also contact franchisees that you select randomly from the Item 20 list. The franchisor-recommended list gives you the best case; the random calls give you reality.
This is a significant red flag. While a franchisor cannot legally prohibit a franchisee from speaking with you, some try to discourage it. If multiple franchisees tell you they were coached or pressured not to speak with prospective buyers, that tells you something important about the franchisor culture.
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