15 Questions to Ask Existing Franchisees Before You Buy

Why Validation Calls Are Non-Negotiable

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.

How to Find Franchisees to Call

Item 20: Your Contact List

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.

Who to Call

Do not just call the five people the franchise sales team recommends. Build your own call list:

• 5-7 franchisees who opened in the last 2 years (to understand the current opening experience)
• 3-5 franchisees who have been in the system 5+ years (for long-term perspective)
• 2-3 franchisees in your target market or a similar market (for local relevance)
• 3-5 former franchisees from the Item 20 departure list (for the other side of the story)
• 2-3 from the franchisor’s reference list (for comparison)

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.

The 15 Questions

Financial Reality (Questions 1-5)

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.

Franchisor Support (Questions 6-9)

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.

Operations and Daily Life (Questions 10-13)

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.

Forward-Looking (Questions 14-15)

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.

What Good vs. Bad Answers Look Like

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”

Red Flags That Should Stop You

Certain patterns in franchisee responses should give you serious pause:

The Silence Pattern

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.

The Consistent Disappointment Pattern

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.

The “Would Not Do It Again” Pattern

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.

The Revolving Door Pattern

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.

The Coached Response Pattern

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.

How to Conduct Effective Validation Calls

Practical Tips

• Call during off-peak hours. For restaurants, avoid lunch and dinner rushes. For service businesses, try mid-morning or mid-afternoon.
• Introduce yourself clearly. “Hi, I’m [name], and I’m considering buying a [franchise name] franchise. I found your contact information in the FDD and was hoping to ask you a few questions about your experience.”
• Keep it to 15-20 minutes unless they want to talk longer. Respect their time.
• Take detailed notes immediately after each call. You will not remember the nuances later.
• Do not lead with financial questions. Start with the softer questions about their experience and work up to the financial topics. People are more willing to share numbers once rapport is established.
• Follow up with former franchisees. They have nothing to lose by being honest, and their perspective on why they left is invaluable.

Track Your Findings

Create a simple spreadsheet to track responses across all your calls. When you can see the data side by side, patterns emerge quickly.

Combining Validation with FDD Analysis

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.