Franchisee Validation Call Script

Before you call: prep and who to call

• Pull the Item 20 franchisee contact list from the FDD. By FTC rule it must list current franchisees plus every former franchisee who left in the most recently completed fiscal year (and anyone the franchisor has lost contact with for 10 or more weeks), not just the franchisor's recommended referrals. To see turnover over a longer horizon, read Item 20's status tables, which cover the last three fiscal years.
• Aim for a broad sample, roughly 5 to 10 or more calls, across different markets, opening years, and unit sizes. Do not stop after two or three positive calls.
• Know that some former franchisees may have signed confidentiality or non-disparagement terms in an exit settlement and may be limited in what they can say. Ask what they can share.
• Prepare one consistent question list so you can compare answers across calls rather than free-forming each conversation.
• Cross-reference Item 20's opened, closed, transferred, and terminated tables before calling, so you can ask directly about any turnover pattern you noticed.
• Decide in advance which answers you will route to your own accountant, lender, or attorney rather than accept as fact from any single franchisee.Ask your attorney

Revenue and cost reality (route to FDD Item 19 and their actual experience)

No franchisee's individual numbers are a guarantee of your results. Verify everything with your own accountant against Item 19.

• Did the franchisor give you an Item 19 financial performance representation, and how did your actual results compare to it?
• In general terms, how long did it take you to reach break-even or cash-flow-positive, in your own experience?
• What ongoing costs surprised you that were not obvious from the FDD, such as labor, cost of goods, local marketing, or insurance?
• What would you tell my accountant to specifically stress-test before I sign?Confirm with a lender or CPA
• Do you think the royalty and marketing-fund percentages are worth what you get back?

Training and franchisor support quality

• How comprehensive was initial training, and did it actually prepare you for day-to-day operations?
• How responsive is the corporate or field-support team when you have a real operational problem?
• What ongoing training exists, and is any of it billed separately?
• How helpful was the franchisor with site selection, build-out, and opening logistics?
• Do you see the ad-fund and marketing dollars actually generating leads for you?
• Has support gotten better, worse, or stayed the same since you opened?

Ramp-up period and working-capital reality

• How long did it actually take from signing to opening your doors?
• Did you need more working capital than the FDD's estimate suggested, in your experience?Confirm with a lender or CPA
• Did you draw on personal savings or credit beyond what you had planned?
• How many hours a week were you personally working in year one?
• What would you budget differently, knowing what you know now?

Relationship with the franchisor

• How would you describe communication and transparency from corporate?
• Do you see brand standards enforced consistently across franchisees, or unevenly?
• Have you had any disputes with the franchisor, and how were they resolved?
• Is there a franchisee advisory council or an independent franchisee association, and do you feel heard through it?
• Would you describe the relationship as a partnership, or more transactional?

Biggest surprises, regrets, and would-they-do-it-again

• What surprised you most in year one that nothing in the FDD or discovery process prepared you for?
• What do you wish you had asked before you signed?
• Knowing what you know now, would you buy this franchise again, and why or why not?
• For former franchisees: why did you leave, close, or sell, and was that your choice or the franchisor's?
• Any advice for someone about to talk to a franchise attorney or accountant before signing?Ask your attorney