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Monday, 12/19/2016

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• • • FRANCHISE TIP • • •

Franchise Tip
Look To The Numbers

Be wary of the operational numbers.

A growing number of franchises seem to include aggregate operational numbers across all their franchisees in the financial disclosure document, or FDD, that all states require. That is good, because it gives you some grasp on reality, though don't take it at face value. Look at where the franchises largely are. If the franchiser wants to expand operations into your area and there aren't many representative locations, then the figures might be of little use. One multi-unit franchisee in San Francisco I've spoken with said that the construction, wage, and real estate figures for his area are much higher than what most other franchisees deal with. It's another good reason to call a large sampling of the franchise owners, and recent former owners, who must be listed. As for the franchise operations that don't want to pass on the operations data, why don't they? Is there something to hide?