Validation Calls: The 12 Questions That Actually Predict Success

Every franchisee in the system is listed in Item 20 of the FDD. Call 8–10 of them — and intentionally pick a mix of top performers, middle-of-the-pack, and people who left the system. The franchisor will offer you a hand-picked list; do that call too, but don't stop there.

The 12 questions

• How long have you been open, and how many units do you own?
• What was your actual all-in build-out cost vs the FDD Item 7 estimate?
• How long until you reached operational breakeven?
• What's a typical month look like for revenue and unit-level EBITDA?
• How responsive is corporate when you need help?
• Has the royalty or fee structure changed since you signed?
• What's your biggest headache that the franchisor doesn't help with?
• How are you finding labor? What's your turnover?
• Have you been audited? What was that experience like?
• If you could do it again, would you sign with this brand?
• Would you buy a second unit? Why or why not?
• What should I ask that I haven't?

Walk-away signals

You're listening for patterns across calls, not single answers. Three specific patterns should give you serious pause: (1) Multiple owners say corporate became less responsive after they signed. (2) Actual build cost is consistently more than 25% over Item 7. (3) Top performers won't open a second unit and can't articulate why. Any one of these isn't necessarily disqualifying. All three together is.