How to Buy a Franchise Business (Part 3)

Part 3: Performing Additional Investigation

Step 1: Talk to former franchisees. The FDD should include a list of people who sold or left the franchise over the past year. You should call them up. A non-disclosure agreement might limit their ability to talk to you. However, try to get answers to the following from at least a few former owners:
•    Why did they leave the franchise?
•    Did they have to file for bankruptcy?
•    Did the franchisor help them sell or transfer the franchise?
•    Did the franchisor terminate the relationship? If so, were franchisees given a chance to correct the problem?

Step 2: Check with the Better Business Bureau. Find out where the franchisor is headquartered, and then check the Better Business Bureau for that city. You can read up on complaints filed against the business.

Step 3: Contact your state’s regulatory agency. Each state has an agency that accepts complaints about franchises. You should contact your agency and check whether complaints have been filed or whether the agency has taken legal action.
•    To find the appropriate office, you should visit your state’s Attorney General’s website.

(To be continued)

Source: https://www.wikihow.com/Buy-a-Franchise-Business