The FDD gives you names and phone numbers of every current and former franchisee. This is not a courtesy. It's the most valuable research tool you have. Former franchisees, in particular, have nothing to lose by being honest with you.
Call at least 10 current franchisees and 5 former ones. Don't email. Call. And don't ask vague questions like "Do you like the franchise?" Ask specific, money-focused questions that reveal the reality behind the FDD's numbers.
Here are the 25 questions I wish I had asked before I invested.
Financial reality questions (ask current franchisees)
- What was your total out-of-pocket cost to open, including everything the FDD didn't account for? (Build-out overruns, additional equipment, working capital shortfalls, permitting delays)
- How long did it take before you were able to pay yourself a livable salary? (Not "break even," but a salary you could survive on)
- What is your gross revenue, and what percentage of that do you actually take home after all fees, costs, and debt service?
- Are the Item 19 financial performance numbers realistic for your location? (If they say "no" or hesitate, that's your answer)
- What's your biggest unexpected ongoing expense that wasn't clearly disclosed?
- If you had to do it over, would you invest the same amount in this franchise again?
Operations and support questions
- How would you rate the franchisor's operational support on a scale of 1-10? (Follow up: what would make it a 10?)
- How often does a field representative visit your location, and what do they actually do when they come?
- Has the franchisor ever made a system-wide change that hurt your profitability? (New required vendor, fee increase, menu/service changes)
- How effective is the national/regional advertising fund? Can you see a direct impact on your local business?
- What's the biggest operational challenge nobody warns you about?
- If you need help on a Saturday night and something is broken, who do you call and how quickly do they respond?
The red answers that should end your evaluation
Knowing which questions to ask is half the work. Knowing which answers should stop your evaluation is the other half. These are the patterns that repeatedly precede failed franchise investments.
Vague answers about take-home pay. If franchisees cannot give you a specific range, or if they deflect with answers like "it depends on how hard you work," that is not modesty. It is a signal that the numbers do not hold up to scrutiny. Every franchisee who has operated for more than 18 months knows what they took home. If they won't say, ask yourself why.
Unanimous praise across your entire validation call list. Some franchisors provide the validation contact list. If every person on that list is enthusiastic, assume the list was filtered. Cross-reference Item 20 of the FDD, which lists all current and former franchisees by contact information. Call franchisees from that list who are not on the franchisor's recommended list.
Inconsistency about support during the ramp period. If the franchise development representative described robust grand opening support during the sales process, and the franchisees you call describe being largely on their own after opening week, that gap is not a miscommunication. It is a pattern. Ask specifically: "How many people were on-site from corporate during your first month of operation, and what were they doing?"
Multiple franchisees with complaints about Item 8 vendors. Item 8 discloses required vendor relationships. If franchisees describe being locked into vendors whose pricing is 20 to 40 percent above market, and they have no recourse, that mandatory markup functions as an additional royalty that does not appear in the royalty line. This is one of the most common ways total system costs exceed what a naive FDD reading suggests.
Former franchisees who left in years 2 through 4. Year 1 exits are usually attributable to personal circumstances. Years 2 through 4 exits, particularly if several happened in the same region around the same time, are a system-level signal. Call as many former franchisees as you can reach. The FDD lists them and franchisors cannot legally instruct them not to speak with you.
How to structure your validation calls
Do not treat validation calls as a checklist exercise. Treat them as the most important hour you will spend in the entire due diligence process. Call at least 10 current franchisees and 5 former franchisees. Plan 30 to 45 minutes per call. Take notes in writing, not just mentally.
Open with context: tell them who you are, where you are considering opening, and that you found their contact information in the FDD. Most franchisees will speak candidly to a prospective buyer because they remember what it felt like to need honest information and not be able to get it.
Ask your financial questions early in the call, before rapport fully develops. People are more likely to give accurate numbers before they start thinking of you as someone they want to encourage. Save questions about the franchisor relationship for the end, when they are more comfortable talking candidly.
If you only have time for five calls, prioritize: one franchisee in a market similar to yours by size and demographics, one franchisee who opened in the last 12 months, one franchisee who has operated for more than five years, one former franchisee from Item 20, and one franchisee who is in the bottom quartile of system performance if you can identify one from the Item 19 data.
Use our AI Franchise Decision Kit to cross-reference what you hear in validation calls against the financial disclosures in the FDD. The combination of what franchisees say and what the numbers show is where the full picture emerges.
Generate customized validation call scripts for any specific franchise.
Free Validation Scripts ToolTerritory and competition questions
- Have you experienced any encroachment (another location, a delivery channel, or corporate account) operating in what you consider your territory?
- How saturated is your local market with similar businesses (franchise and independent)?
- Has the franchisor opened or approved any locations that you feel are too close to yours?
Exit and long-term questions
- Do you know anyone who has tried to sell their franchise? How did it go? (What was the sale price relative to their investment?)
- Do you plan to renew when your franchise term expires? Why or why not?
- Has anyone in the system been terminated by the franchisor? What happened?
- If you could renegotiate one thing in your franchise agreement, what would it be?
- What's the general morale among franchisees in the system? (Is there an informal franchisee group or forum?)
Questions specifically for former franchisees
- Why did you leave the system? (Listen carefully: was it financial failure, personal reasons, or frustration with the franchisor?)
- Did the franchise perform as you expected based on the FDD and the sales process?
- What did you lose, financially and personally, from this experience?
- Is there anything you feel the franchisor misrepresented during the sales process?
- What would you tell someone considering this franchise right now?
A warning from experience: If a franchisor or franchise broker discourages you from calling franchisees, or tries to steer you toward a curated list of "happy" owners, treat that as a major red flag. The FDD exists specifically so you can do this research. Anyone who tries to prevent it is not acting in your interest.
How to use the answers
You're looking for patterns, not individual opinions. If 3 out of 10 franchisees mention the same problem (weak advertising, poor support, territory encroachment), that's a systemic issue, not bad luck.
If current franchisees consistently report take-home pay below what you need to live on, the franchise doesn't work at your investment level regardless of what the FDD's Item 19 says.
If former franchisees describe a pattern of feeling misled during the sales process, that tells you about the culture of the organization you're about to marry for 10 years.