Buying a franchise: Evaluating the deal

The very nature of franchising makes if fairly easy for the potential owner to evaluate the business. After all, there may be several -- even several hundred -- other stores in the chain that are just like the one you would have. Make sure you get the "insider information" from other franchisee owners by interviewing at least a half-dozen of your choice, not the franchiser's. Visit the company headquarters and see if your visions mesh or clash. Ask about their business philosophy and the background of the officers.

Have an experienced franchise attorney review the franchise agreement or contract as well as the company's disclosure documents, also known as the Uniform Offering Circular. The Federal Trade Commission requires each franchisor to issue a copy to potential buyers. It's a treasure trove of company information and should at least include history, current financial information, fees and records of any litigation.