Franchise Due Diligence Guides
Independent, data-driven guides to help you evaluate franchise investments with confidence. Written for buyers, never influenced by franchisors.
Featured Guides
Start hereHow to Read a Franchise Disclosure Document (FDD)
A plain-English walkthrough of all 23 FDD items — what each one tells you, what to look for, and what red flags to spot before you sign anything.
Item 19: The Most Important Section in Any FDD
Only 40% of FDDs include financial performance data. Here's how to find, read, and interrogate Item 19 — including the tricks franchisors use to make numbers look better than they are.
Understanding Franchise Fees: What You'll Actually Pay
Beyond the initial franchise fee: royalties, marketing funds, technology fees, and transfer costs. Here's how to calculate your true cost of ownership before you're locked in.
How Royalties and Ad Fees Affect Your Top-Line Sales
Understand the math behind franchise fees — what happens to every dollar of revenue before you see it, and why gross sales is not profit.
25 Questions to Ask Existing Franchisees About Economics
The FDD tells you revenue. Franchisees tell you costs. These are the 25 questions that reveal what the disclosure document leaves out.
Due Diligence
2 guidesFranchise Due Diligence Checklist: 50 Questions Before You Sign
A structured checklist for evaluating any franchise — organized by FDD section, franchisee interviews, and financial analysis. Use this before handing over any money.
Updated Apr 1, 2026
Territory Protection in Franchising: What Item 12 Really Means
"Exclusive territory" rarely means what you think it means. Here's how to read Item 12 to understand what the franchisor can — and cannot — do in your market.
Updated Apr 1, 2026
FDD Analysis
2 guidesItem 20: How to Evaluate Franchise Closure Rates
Item 20 contains four tables that reveal whether a franchise system is growing or dying. Here's what the numbers mean and how to calculate the real closure rate.
Updated Apr 1, 2026
Red Flags in Item 3: How to Spot Problem Franchisors Through Litigation History
Not all lawsuits are created equal. Here's how to read Item 3 to identify dangerous patterns — franchisee class actions, regulatory enforcement, and serial litigation that signal a troubled system.
Updated Apr 1, 2026