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If you’ve been thinking about business ownership – especially through owning a franchise – you might be waiting for the “perfect moment.” Here’s the good news: many indicators suggest that the moment is closer than you think.

When the economy is booming, costs are higher, competition is fierce, and labor is tight.
When the economy cools, financing tightens, but talent becomes more available – and costs may ease.

The point? Each economic cycle comes with its own set of advantages and its own challenges. Waiting for the “perfect time” usually means waiting forever.

If economic factors are influencing your decision on when to buy a franchise, you might be waiting in vain. In this article, I am going to discuss the ins and outs of economic influences on franchising.

I hope that by the time you’re done reading, you will feel confident in moving forward with franchise ownership regardless of the economy in any given moment. You will be informed about how the economy does and does not affect franchise ownership – and you will understand where considering economic factors is important and where it falls short.

The Case for Taking Action — Regardless of the Economy

Business Ownership Is a Long Game
Franchises are not designed for quick wins – they’re built for consistent, long-term growth. Whether you start in a high or low economic cycle, your true results come from how well you operate, lead, and adapt over time – not the headlines of the day.
Great Opportunities Don’t Wait
The best franchise territories, prime locations, and top-performing brands are being awarded right now. Market timing matters less than availability – and waiting too long can mean missing your ideal fit. Sometimes, getting into the game during an economic downturn actually offers you MORE opportunities that others are missing out on because of undue caution.
Resilient Businesses Thrive in Every Market
Some of the strongest franchise models are built around essential services – think home repair, senior care, B2B services, or health and wellness. These sectors don’t rely on economic booms to succeed. In fact, many grow because of economic shifts.
You Can Control Your Effort, Not the Economy
What you can’t control: interest rates, consumer confidence, or inflation. What you can control: your mindset, effort, and execution. Those factors have far more impact on your long-term success than external conditions.
Downturns Often Create the Best Entry Points
Historically, some of the strongest franchise success stories began during recessions or slowdowns. Why? Lower startup costs, greater labor availability, and pent-up demand that returns when conditions stabilize. You’re betting that the economy will return to “normal” again – and that bet has paid off every single time.

Now, let’s take a closer look at some of the many reasons that owning a franchise can be a successful path forward in any economy.

Resilient Growth in Franchising

Even amid uncertainty, the franchise industry is showing strength:

In 2024, U.S. franchise establishments increased by about 2.2%.
For 2025, output for franchise-owned businesses is projected to reach approximately $936 billion, up about 4.4% over 2024.
Some sectors – like personal services (health and wellness, home services, etc.) and quick‐service restaurants (QSR) – are expected to grow faster than many other parts of the economy.

What does this tell us? Franchising is not frozen by economic headwinds. Instead, it’s one of the business ownership options showing forward momentum.

The Support of a Proven Model

What makes a franchise attractive in uncertain times? There are some consistent facts about franchise ownership that make it a worthwhile investment no matter the economic situation. In other words, it is always a good time to own a franchise when you take these factors into consideration…

You’re stepping into a business model with brand recognition, established systems, training and support.
Franchises benefit from group buying power, operational efficiencies, and marketing muscle – things independent startups often lack.
If consumer spending remains cautious, familiarity matters. Consumers tend to stick with trusted brands when the economy is shaky.

Economic Conditions Aligning in Your Favor

Another perspective? While some people see the current economy as risky and uncertain, and hence unfavorable for franchise ownership, that is not the whole story. Here are some of the factors creating a favorable environment for franchise ownership right now:

Inflation is moderating, and interest rates are stabilizing. These factors reduce some of the cost pressure for new business owners.
Consumer confidence is improving. When people feel more confident about their income and jobs, they start spending again – especially on the services and convenience offerings that many franchises provide.
Franchising is expanding in regions with population growth and business‐friendly environments – meaning there is more opportunity for ownership and growth.

What Does the “Right Timing” Really Mean for YOU?

Economic factors are just one part of the equation when you are considering buying a franchise. Really, your personal readiness is much more important. Let’s translate what “the right time to buy a franchise” might mean for you:

You’re ready to transition from being an employee to being an owner – and you have the mindset for it.
You have or can assemble the investment capital (or financing) to get into ownership before the market gets crowded.
You are looking for a model that fits your skills, lifestyle, location preference, and tolerance for risk.
You want to be in business when the economy is emerging from uncertainty, rather than waiting until everything is perfect (because it never truly is).

All that said, keep in mind that due diligence is still important…

Doing Your Due Diligence

Even though conditions are favorable, success as a franchise owner is not a guarantee. As such, you will want to be cautious and thorough. Here at The Franchise Fit Company, we are here to guide you through every step of the process on your journey to becoming a franchise owner. Any questions you have along the way, we’ve got your back.

Here are a couple of the most important parts of true due diligence when investigating a franchise:

Review the franchise disclosure document (FDD), look at historical financials, and talk to existing franchisees.
Understand the industry you’re entering – some are more resilient (home services, essential services) than others (luxury discretionary retail).
Be realistic about your role. Ownership still means work, leadership, decision-making, and risk. The model may be proven, but the execution is up to you.

What This Means for You

If you’ve been waiting for some sign to start seriously exploring franchise ownership – consider this it.
Now could be the perfect window to:

Learn more about how franchising works (fees, models, support)
Clarify your goals: What’s the lifestyle you’re seeking? What type of business fits you?
Get in the game early enough to pick the right brand, market, and model before everyone jumps in.

At The Franchise Fit Company, my mission is to help you explore FREE of pressure, figure out if business ownership via franchising is the right next chapter, and then support you in finding the right fit. Because fit matters – not just timing.

Discover Fear-Free Franchise Ownership

There are always going to be stressors when it comes to owning a franchise, from the process of picking the right business to the day-to-day conundrums that arise as a business owner. But economic factors do not need to be the thing that holds you back from starting your next chapter. Want to learn more about the impact of the economy on franchise ownership? Let’s talk about it!

Schedule a free meeting right here. I can’t wait to chat with you and discuss franchise opportunities, building your business, and starting a new chapter in your career. Working with me is always 100% free, 100% of the time. Talk to you soon!

How Does the Economic Landscape Factor Into Your Decision to Buy a Franchise?

Franchise 101

SBA loans vs. ROBS program financing… It’s a tough choice! Explore the option that makes the most sense for YOU in our latest article.

One of the most common questions that I get asked as a franchise coach? How can I afford a franchise? Nobody is expecting you to completely cover this investment out of pocket (although paying for your franchise cash is certainly a possibility). For those who need them, many franchise funding options are available. Today, we are going to talk about two of the most popular.

When prospective franchise owners evaluate funding options, two of the most common structures are SBA 7(a) loans and ROBS (Rollovers as Business Start-ups) using retirement funds. Each approach can work well depending on the individual’s financial situation, risk tolerance, and long-term goals.

Now, let’s take a closer look at these two options. This clear breakdown will compare structure, benefits, risks, and long-term implications so that you can feel confident in your path forward toward owning a franchise.

SBA (7a) Loan vs. ROBS (401k Rollover): What Franchise Buyers Should Know

If you are looking to buy a franchise, understanding the funding options behind franchise opportunities is a crucial part of the process. Here at The Franchise Fit Company, we take franchise education seriously. We want to help you build deep knowledge of your options so that you can move forward feeling empowered, confident, and ready to take on franchise ownership like a boss. Let’s start with the SBA (Small Business Administration) loan…

Fit Tip: Check out our webinar on SBA loans to learn more about this funding option in a video format.

1. SBA 7(a) Loan

The 7(a) loan program is the Small Business Administration’s primary business loan program focused on providing financial assistance to small businesses – yes, you read that right! Franchises are small businesses, too! Here’s how it works…

Structure

The SBA 7(a) loan is the most common financing vehicle used in franchising.

How it works:

First, the borrower applies through an SBA-approved lender (bank or non-bank lender).
The lender issues the loan, and the U.S. Small Business Administration guarantees a portion of the loan (typically 50% to 75%).
The borrower receives capital, which can be used for for:
- Franchise fees
- Buildout
- Equipment
- Working capital
The business repays the loan monthly with interest.

Those are the basic steps to acquiring and repaying a Small Business Administration loan. HEre are some other fasts facts you need to know about the typical SBA franchise loan structure:

Component	Typical Range
Loan size	Up to $5 million
Down payment	~10–30%
Term	Up to 10 years (business)
Interest	Prime + margin
Personal guarantee	Required

Benefits of SBA Financing

Leverage your capital
Instead of using all personal funds, the SBA allows business owners to invest a portion (usually ~20%) and borrow the rest. This is advantageous for those who are not particularly liquid or who have less readily available cash to put down.

Preserves retirement accounts
Your 401(k) remains invested and growing for retirement, as opposed to being used to open your business through an option like ROBS.

Builds business credit history
With an SBA loan, you will be able to build a strong credit history for your business.

Predictable monthly payments
You will have an understanding of the loan term and the payment you owe each month before you sign anything. This helps you avoid unexpected costs.

Lower interest vs. many alternative lending options
As the SBA 7(a) loan is a government-backed program, you will be able to access competitive interest rates that you may not see from competitors.

Considerations & Risk

Personal Guarantee
The borrower is personally responsible for repayment.

Collateral Requirements
Homes, retirement accounts, or other assets may be pledged depending on lender policies.

Debt Service Pressure
Monthly loan payments begin quickly and can impact early cash flow.

Approval Process
SBA loans require documentation and underwriting and can take 30–90 days to complete.

Long-Term Implications

Taking out an SBA 7(a) loan has long-term implications both positive and negative for future franchise owners.

Builds long-term credit and borrowing capability
Interest expense reduces taxable income
Requires stable cash flow to service debt
Personal liability exists if the business fails

2. ROBS (Rollovers as Business Start-ups)

Now that you have a better understanding of the SBA loan option, let’s turn our attention to ROBS. This acronym stands for Rollovers as Business Start-ups, and it is a little-known franchise funding option that might be just right for your needs.

Remember, even though the ROBS program uses your retirement funds, that is not a red flag! Some people are scared off by the prospect of dipping into their retirement savings, and that is totally understandable. This option may not be for everyone. Other people, however, buying a franchise as an excellent way to build their retirement funds even further and actually use that money to generate wealth that will support their family for years. Here’s a little more about the ROBS program…

Structure

A ROBS allows someone to use retirement funds (typically from a 401k or IRA) to fund a business without paying early withdrawal penalties or taxes.

The process:

A new C-Corporation is created
A new 401(k) plan is established within that corporation
Your existing retirement funds are rolled into the new 401(k)
The 401(k) purchases stock in the new company
The company now has cash to fund the business

Essentially, your retirement funds become equity in your company. Sounds pretty good, doesn’t it?

Benefits of a ROBS

No debt payments
There are no monthly loan payments, which improves early cash flow.

No interest costs
With the ROBS program, you are not borrowing money – you are using your own! Therefore, you do not have to pay for interest, saving you lots of money in the long term.

No personal guarantee
Again, not borrowing money comes in handy here. There is no need to leverage your assets or cough up collateral in order to use your own money to buy a franchise.

Faster funding vs. SBA
Compared with SBA 7(a) loans, it typically takes less time to set up a rollover through the ROBS program.

Can be combined with SBA financing
Many franchise owners use a ROBS as the down payment for an SBA loan. Sound interesting to you? We can talk more about the financial side of franchise ownership in our free, one-on-one consultation.

Considerations & Risks

Retirement Risk
With ROBS, your retirement savings are tied directly to the performance of the franchise business. While some people appreciate taking control of their retirement earnings, others find this too risky. Your own individual risk tolerance is up to you.

Must Operate as a C-Corporation
ROBS structures require a corporate structure, which may have tax implications.

Compliance Requirements
The retirement plan must follow IRS and ERISA regulations.

Administrative Costs
It does cost money to set up a rollover through the ROBS program. Here are some ballpark figures you can expect to see…

Fee Type	Typical Range
Setup	$4,000 – $6,000
Monthly administration	$100 – $200

Long-Term Implications

There are both positives and negatives to using a ROBS rollover to fund your franchise. Here are some key points to consider when choosing the right franchise funding option for you:

Your retirement investment is directly tied to business success
If the business fails, the retirement funds invested may be lost
Potential upside if the business grows in value
Requires ongoing retirement plan administration

SBA vs ROBS: Side-by-Side Comparison

Find some more information about an SBA loan vs. a ROBS program rollover right here…

Factor	SBA Loan	ROBS
Debt	Yes	No
Monthly payments	Yes	No
Interest	Yes	No
Personal guarantee	Yes	No
Risk to retirement funds	No	Yes
Business structure required	Any	C-Corporation
Approval process	Bank underwriting	Setup through ROBS provider
Tax advantages	Interest deductible	None specific
Cash flow pressure	Higher	Lower

Hybrid Strategy (Common in Franchising)

Many franchise owners use both an SBA loan and a ROBS rollover. Here is an example of what that might look like…

The franchisee uses $100K from ROBS (retirement rollover) to get started
They also take out a $400K SBA loan

So, why would you choose this hybrid approach? Benefits of the hybrid approach include…

Reduces SBA down payment requirements
Limits personal debt exposure
Preserves some retirement funds

I like to say that this hybrid structure offers you the best of both worlds – mitigating risks from either side!

Strategic Considerations for Prospective Business Owners

When deciding between SBA or ROBS, here are some key questions to ask yourself:

1. Risk tolerance
Are you comfortable tying your retirement savings to the franchise business?

2. Cash flow expectations
Will the franchise business generate revenue quickly enough to support loan payments?

3. Long-term financial planning
How important is preserving your retirement investments?

4. Exit strategy
How will the business sale or retirement transition impact your financial future?

Final Thoughts on Franchise Funding Options

Both SBA loans and ROBS structures are widely used in franchising, but they lend themselves to different financial strategies:

SBA loans leverage capital but create debt obligations.
ROBS eliminates debt but increases personal investment risk.

The best option often depends on financial profile, risk tolerance, and long-term wealth planning. We will talk through all of your options related to owning a franchise during our series of coaching meetings.

How to Fund a Franchise: SBA vs ROBS

Financing

Have you ever wondered why franchise owners have to pay royalty fees? If so, you are not alone. Royalty fees are one of the first numbers that will probably catch your eye when you start looking into owning a franchise – and sometimes, they might seem unfair and frustrating.

Understanding franchise royalties is an important step of the process when opening a franchise and in the years that come after your grand opening. Today, we are going to break down the ins and outs of royalty fees so that you feel confident in what you’re paying for – and why.

Why Franchise Owners Pay Royalty Fees and What Other Ongoing Fees to Expect

If you’re exploring franchise ownership, one of the first numbers that jumps off the page in the FDD is this: Royalties.

You are going to see that royalties eat up 5%… 6%… even 8% of gross revenue.

And the natural reaction is: “Why am I paying someone a percentage of my revenue forever?”

That is a fair question when it comes to owning a franchise.

Let’s break it down clearly, covering what royalties are, why they exist, and what other recurring fees you should understand before signing a franchise agreement.

What Are Royalties?

A royalty is an ongoing fee that a franchise owner pays to the franchisor. You will typically see royalty fees structured in one of the following ways:

A percentage of gross revenue (most common)
A flat monthly fee
A tiered structure (much less common).

Most systems fall in the 4% to 8% range of gross revenue, though some go higher depending on industry and brand strength.

Fit Tip: Remember, royalty fees are usually based on top-line revenue, not profit. This is an important distinction to keep in mind when you are opening a franchise and budgeting to compensate yourself and your employees.

Why Do Franchise Owners Pay Royalty Fees?

Royalties are not just a “brand tax.” They fund the infrastructure that supports the entire franchise system.

We have talked a lot on the blog about the difference between starting a business from scratch, entrepreneurship through acquisition (ETA), and franchise ownership. Franchise royalties pay for a lot of those differences. Here’s what they typically cover…

1. Branding and Intellectual Property

You are licensing a lot from the franchise, including:

The brand name
The trademarks
The operating system
The playbook

That brand equity did not appear overnight. Royalties support ongoing brand development.

2. Ongoing Training and Support

When you are opening a franchise, you want to invest in a strong system. Strong systems provide:

Field support
Coaching
Operational guidance
Technology upgrades
System refinements

Royalties fund the teams that make that level of support possible.

3. Research and Development

Markets change. Consumer behavior shifts. Technology evolves. Royalties help the franchisor ensure that they stay with the times, allowing them to…

Improve processes
Enhance marketing systems
Develop new products/services
Stay competitive

A healthy system reinvests in innovation, and that is part of what franchise royalties fund.

4. System-Wide Stability

A franchise system only works if the brand remains strong across locations. Franchise royalties allow the franchisor to:

Enforce standards
Maintain compliance
Protect the integrity of the network

Without recurring revenue, a franchisor cannot sustain long-term infrastructure. You benefit when all of the brands in your system are doing well, and royalties help maintain that system-wide stability and a reputation for excellence.

But Let’s Be Honest…

Royalties reduce your margin. You are not keeping 100% of your revenue like an independent operator would.

The question becomes: Is the system support worth the percentage?

That’s a question of business analysis – not just an emotional reaction to a fee.

Now, as an independent operator, you would need to invest in infrastructure to run your business. The offset is finding vendors, marketing strategies, brand, operations – and of course, the process of trial and error. For many, the cost of royalties takes away that headache.

Franchise royalties pay for you to be part of a system where the trial and error is done for you. Vendors are sourced. Marketing strategies are nailed down. You are buying into a solid, reliable, reputable brand – and that benefits your bottom line.

Other Recurring Franchise Fees You May See

Royalties are just one part of the equation. Do not forget about some other common ongoing franchise fees disclosed in the FDD:

1. Brand Fund / Marketing Fund Contribution

This typically amounts to between 1% and 4% of gross revenue. It goes into a national or system-wide marketing fund used for:

Digital advertising
Brand campaigns
Creative development
SEO
Website management
PR initiatives

Important distinction: This is separate from what you spend on local marketing in your territory. It is used for the brand as a whole, and the franchisor decides specifically what to spend it on.

2. Local Advertising Requirements

Some systems require additional franchise fee spend for local advertising, such as…

A minimum monthly ad spend
A percentage allocated locally
Participation in co-op marketing groups

Even if it is not required by your franchise brand, local marketing is essential, both when you are first opening a franchise and in the years that follow.

3. Technology Fees

Franchise fees for technology may include:

CRM systems
POS software
Reporting platforms
Scheduling systems
Website hosting

You will often see technology fees structures as either a flat monthly fee or a per-location tech fee. It all depends on your franchise system.

4. Renewal Fees

When your initial term ends (often after 10 years), you may pay:

A renewal fee
A percentage of the then-current franchise fee

Paying these fees essentially re-ups your license to use the franchise’s branding and continue operating under their banner. The renewal fee is usually significantly less than the franchise fee you will pay when you are first opening a franchise.

5. Call Center

If your franchise system offers a call center for inbound leads, scheduling, etc., you might have to pay for that service. In some cases, it may be optional – in others, it may be required. Again, it all depends on the brand. Either way, this is usually assessed as a flat monthly fee.

6. Transfer Fees

If you sell your franchise, the franchisor typically charges a transfer fee, generally assessed between 25% and 50% of the current franchise fee at the time of transfer.

Fit Tip: Getting overwhelmed with all of these fees? Remember, they will be outlined clearly in your Franchise Disclosure Document (FDD).

7. Audit or Late Fees

There may be penalties or interest assessed from the franchisor if one of the following scenarios occur:

Reports are late
Royalties are unpaid
An audit finds underreporting

How to Evaluate Franchise Royalties the Right Way

Here’s what I tell my clients: Do not evaluate royalties in isolation.

Instead, ask thoughtful questions:

What does this percentage buy me?
Does the support match the fee?
Are franchisees satisfied with the value received?
Is the brand investing back into growth?
Does the financial model still work after royalties?

A 6% royalty in a high-margin, well-supported system may be far more attractive than a 3% royalty in a weak one. Lower is not automatically better – you get what you pay for.

A Common Misconception About Franchise Royalties

Many clients will say something like this before opening a franchise: “Once I’m up and running, what does the franchisor really do?”

If the answer is “not much,” that’s a red flag.

Healthy franchise systems are actively engaged, providing services like:

Coaching performance
Refining strategy
Managing brand consistency
Improving technology
Protecting the network
Advising your on growth/scaling strategy for long-term success

Royalties should feel like fuel for growth – not dead weight that’s eating away at your margins with no benefit to you as an owner.

Final FranFit Thoughts on Royalty Fees

Royalties are the price of leveraging:

An established brand
A proven system
Ongoing support
A network of peers

You are not paying to “rent a logo.” You are buying into an ecosystem.

The real question is not: “Why do I have to pay royalties?”

It is: “Does this system generate more value than it costs me?”

That’s where smart diligence comes in. If you’re evaluating a specific brand and want help modeling what royalties actually mean for your take-home income, that’s a conversation worth having before you sign.

Start Your Journey to Owning a Franchise Today

Are you ready to explore the ins and outs of opening a franchise? I’m ready to help! At The Franchise Fit Company, we are not selling anything. We are simply helping you navigate the process of opening a franchise and reducing the headaches you experience along the way. We help with everything from initially brand matching to FDD guidance to the validation process – and everything in between. The best franchise is the one that FITS you.

What Are Royalty Fees in Franchising?

Franchise 101

When you are looking at franchise opportunities to find the perfect franchise business for you, you will eventually be confronted with the FDD. This acronym stands for Franchise Disclosure Document, and it is an important piece of the franchise validation process.

Today, we are going to look more closely at one component of the FDD: lawyer review. Let’s dive deeper into this frequently asked question about franchise opportunities.

Pros, Cons, Timing – and What Most Buyers Get Wrong

If you are seriously exploring franchise ownership, at some point you will hear this advice: “You should have a lawyer review the FDD.”

That may be true. But it is also incomplete.

As someone who walks clients through the franchise business evaluation process every day, I’ve seen both sides. On the one hand, there are buyers who skip legal review entirely. And on the other hand, there are buyers who hire the wrong attorney and create unnecessary friction.

To avoid creating problems as you explore franchise opportunities and look for the best franchise to own, let’s break this down clearly and take a look at the pros and cons of working with a franchise lawyer to review the FDD.

Fit Tip: Still have questions about the FDD in general? We have an article that can help! If you did not stop off and read about “Understanding the Franchise Disclosure Document (FDD),” I recommend starting there before continuing.

The Pros of Using a Franchise Lawyer

Before we talk about the pros of using a franchise lawyer when you are looking at how to buy a franchise, let me make one thing clear: We are not talking about just any lawyer. You need to use a franchise lawyer (if you are using a lawyer at all).

I often say this to clients: “You would not go to a franchise lawyer to advise on your divorce settlement, so let’s not go to the friend of the family real estate lawyer to review your FRANCHISE disclosure document.” Right? Here is why…

1. Franchise Lawyers Understand Franchise-Specific Law

Franchising is governed by both federal regulation and state registration requirements. A franchise attorney understands:

State-specific addendums
Registration states vs. non-registration states (learn more in this article about FDD re-registration and “going dark”)
Relationship laws (like termination protections in certain states)

A general business lawyer may have a deep understanding of these franchise-specific concepts. Remember, practicing law is a highly specialized business. When you are looking for the best franchise to own, you want an expert to help advise you!

2. Franchise Lawyers Know What Is Standard vs. Unusual

Franchise agreements are heavily one-sided. That is normal. After all, franchisors want to convince you that theirs is the best franchise to own.

Fit Tip: That’s where I come in – I am not trying to sell you on one franchise versus another franchise business. We simply work together to determine the franchise opportunities that best fit your needs and are most aligned with your goals as a business owner.

Anyway, back to franchise lawyer information. An experienced franchise attorney can tell you:

What is standard across systems
What is unusually restrictive
What creates long-term risk exposure

That perspective matters when you are investing in a franchise business.

3. Franchise Lawyers Clarify Long-Term Risk

With their extensive industry knowledge, a franchise lawyer can help you understand:

Personal guarantees
Transfer restrictions
Liquidated damages
Default triggers
Non-compete scope

You are not just signing up for year one with your franchise business. You are signing on for a relationship lasting five to ten years… or maybe even longer.

The Cons (or Limitations) of Using a Franchise Lawyer

Now, let’s balance our conversation about franchise business lawyers and discuss the drawbacks of a franchise lawyer reviewing your FDD.

1. Franchise Lawyers Cost Money

Legal review can range from $2,500 to $5,000 or even more, depending on the complexity of what you are looking for.

For some buyers, that feels like a heavy ask before they have even decided. Plus, investing in a franchise costs money, so you may want to save your funds for the Franchise Fee.

2. Franchise Lawyers Will Not Tell You if This Is a Good Business

A lawyer reviews legal risk. They do not:

Evaluate market viability
Validate financial model assumptions
Assess operational fit
Tell you whether the brand aligns with your lifestyle goals

Legal strength does not equal business viability. This is why it is important to explore a franchise business from every angle.

Fit Tip: Working with The Franchise Fit Company gives you an opportunity to investigate a variety of different franchise opportunities to find the best franchise to own for YOU. We support you through an unbiased review of your options so that you can feel confident moving forward.

3. Some Franchise Attorneys Create Fear

This point goes back to the importance of using a franchise-specific lawyer. If an attorney does not specialize in franchising, they may:

Flag standard clauses as “dangerous”
Overreact to common franchise language
Suggest unrealistic negotiations

All of these issues can lead to tension with the franchisor – unnecessarily.

When Should You Have a Franchise Lawyer Review an FDD?

So, is there a situation when you should have a franchise lawyer review the FDD from a franchise business? And if so, when? Here is my professional recommendation:

You can consider having a franchise lawyer review the FDD after…

You have validated with multiple franchisees
You understand the financial model
You feel confident in the brand
You are preparing to sign

And make sure you do so before:

You attend a Meet the Team or Discovery Day

Legal review should be the final diligence layer, not the first step on your list once you receive the Franchise Disclosure Document.

Why You Should NOT Use a Family or Divorce Lawyer

This is important. Remember my comment above?? Let me shed more light onto this topic to drive the point home.

A divorce attorney or family lawyer may be excellent at their specialty… but franchising is its own niche. I will say it again: You would never hire a personal injury lawyer to litigate your divorce. You would never hire a divorce lawyer to settle a workman’s compensation dispute. Law is a specialized practice, so hiring a specialized lawyer DOES matter.

Here’s why it makes such a big difference:

Franchise agreements are system-wide contracts used across hundreds of owners
Many clauses are intentionally non-negotiable
Certain “harsh” language is industry standard
Franchise relationship law is specialized

Using the wrong attorney can create a number of issues, including…

Alarming you unnecessarily
Damaging rapport with the franchisor
Creating redlines that will never be accepted
Slowing down your process

You want someone who understands franchise norms, not someone who treats the FDD like a real estate contract. Choosing a specialized lawyer makes a big difference when evaluating franchise opportunities.

Will a Franchisor Negotiate a Redlined FDD?

The short answer? Rarely.

Longer answer? The FDD itself is a registered disclosure document. It is not negotiated. The Franchise Agreement inside it may have limited flexibility.

Here’s the reality. Most established franchisors…

Do not negotiate core economics
Do not modify operational standards
Do not change system-wide rules

There are a few things that may be more possible to negotiate. In rare cases, you might see:

Minor territory clarifications
Payment structure adjustments
Addendums for multi-unit development
State-required changes

But walking in with heavy redlines as a single-unit buyer? That is usually not productive. AND, you are setting yourself up for disappointment when they say NO to your suggested changes.

Franchising works because of uniformity. If every franchisee negotiated custom terms, the system would break.

So… Should You Use a Franchise Lawyer?

In most serious franchise purchases, yes. But the type of lawyer is important. Make sure that you…

Use one who specializes in franchising.
Use them at the right stage.
Understand their role.
Don’t expect them to negotiate the system into something unrecognizable.

Would I ever tell someone NO to an attorney review? Yes, I would. There is a time and place for using a franchise attorney, and I will help you navigate choosing that moment.

When you feel comfortable with the agreement but you are only wanting a review for negotiation purposes, that is wasting your time and money.

Legal review is about understanding risk – not rewriting the model.

Final Franchise Fit Company Thoughts

Franchise ownership is not just about reading a contract. It is about so much more…

Lifestyle alignment
Financial readiness
Operational capability
Brand trust
Mutual validation

A franchise lawyer protects you legally. But your broader diligence – validation calls, financial modeling, discovery day conversations – protects you strategically.

Know the difference.

Take the Next Step to Find Your Franchise Business

Should You Hire a Franchise Lawyer to Review a FDD (YAY or NAY)?

Franchise 101

Not all silence in franchising is bad news.

One of the most common — and legitimate — reasons a franchisor may pause communication or franchise sales is FDD re-registration. Unfortunately, this period is often misunderstood by prospective franchisees and those exploring brands and interpreted as trouble, instability, or worse. Why are they “going dark”? We had to stop the process – is something wrong?

Let’s clear that up so that you can move ahead confidently with owning a franchise.

FIT Tip: Learn more about the Franchise Disclosure Document (FDD) in our recent blog.

Not All Silence Is a Red Flag

Every franchisor is required to update and re-register its Franchise Disclosure Document (FDD) annually, typically following its fiscal year-end.

During this compliance window, it is normal for things to slow down or temporarily stop on the development side of the business.

This is what’s actually happening behind the scenes…

What’s Actually Going On During FDD Re-Registration

Most franchisors must pause franchise sales while their updated FDD is being finalized and approved. During this time:

Franchise sales pause
Discovery Days may be delayed
Development teams go quiet
No franchise agreements can legally be signed

This isn’t failure or avoidance — it’s responsible compliance.

A franchisor that continues selling during this period is taking on regulatory and legal risk — for themselves and for the prospective franchisee. They officially do not have an active FDD – the old one is out, and the new one is being approved.

Selling franchises with an outdated or unapproved FDD can result in:

Regulatory penalties
Buyer rescission rights (the ability to unwind the deal)
Legal exposure for both parties

That’s why a franchisor who pauses sales during renewal is actually doing the right thing, even if it feels inconvenient or uncomfortable from the outside when you are looking at franchise opportunities.

What a Franchisor Updates During FDD Re-Registration

What is happening when a franchisor updates its FDD? Here is a look behind the scenes at this important piece in owning a franchise…

Financial Statements (Item 21)

This is the backbone of the update.

Audited balance sheet
Income statement
Cash flow statement

Why it matters:
This tells you whether the franchisor is financially healthy, stable, or under strain. It’s one of the biggest reasons sales must pause until renewal is complete. And, all prospective franchisees want updated numbers for their evaluation of the system they are inquiring about. Wouldn’t you want to know what happened last year? Updating the FDD is an important piece of giving you the full picture before owning a franchise.

Franchise System Growth & Turnover (Item 20)

When a franchise business reviews Item 20 in their FDD, they are looking for updated counts of:

New franchise openings
Closures
Transfers / resales
Terminations

Why it matters:
This shows real system momentum (or contraction). Trends here often matter more than headline brand size. It is important to see sustained growth in the brand, with new owners joining and being successful. Is it ok to see a few close, sure – not all reasons for closing are bad. Ideally, you want to see growth, increased sales numbers, and a healthy system.

Litigation and Bankruptcy Updates (Items 3 & 4)

An update to the FDD must include any new lawsuits, settlements, or bankruptcies involving:

The franchisor
Executives
Parent or affiliate companies

Why it matters:
Prospective franchisees deserve visibility into legal risk before signing. Do all have a clean slate? No, but it is good to understand what is going on with your support system.

Fees and Investment Ranges (Items 5–7)

These sections of an FDD may be updated to reflect:

Fee increases or restructuring
Changes in required vendors or costs
Revised working capital assumptions

Why it matters:
Inflation, labor costs, real estate, and insurance changes often show up here. As someone interested in owning a franchise, it is imperative that you understand the fees associated with launching and growing a new business. Your financial preparation is a huge factor in success at launch.

Support, Training, and Operations (Item 11)

In this section of the FDD, updates may include:

Changes to training format or duration
Adjustments to field support
New technology platforms or systems

Why it matters:
What you’re promised going forward is not necessarily what existed two years ago. Part of being in a franchise system is the frameworks, support, and coaching you receive. When you read the FDDs for franchise opportunities, you want to ensure you are receiving the infrastructure discussed in the evaluation process.

Earnings Disclosures (Item 19) – If Provided

If the franchisor offers a Financial Performance Representation (Item 19):

Data is refreshed
Outdated performance groups may be removed
New averages or medians may appear

Why it matters:
This is one of the most scrutinized updates – and one of the most regulated. Franchisors typically show only operating franchise units in the system that have performed for a full 12 months. You will want to see an updated snapshot of the system – while only averages, these numbers should improve year over year as the franchise grows.

Remember: Financial disclosures in an Item 19 are not required, but they are often included in the FDD.

Agreement and Addendum Changes (Item 22)

Updates to Item 22 include any changes to:

Franchise agreement language
Addendums
State-specific riders

Why it matters:
Even “small” edits can materially affect exit rights, transfer rules, or obligations. Do not gloss over this important section of the FDD when you are considering franchise opportunities.

How Differentiate Between Normal Compliance and Real Trouble

The key difference between normal compliance and changes that you should actually worry about is not silence — it is communication and continuity.

What Normal FDD Re-Registration Looks Like

A clear explanation when asked
A defined (even if flexible) timeline
Ongoing support for existing franchisees
Corporate operations continuing as usual

Potential Red Flags to Watch For

Vague or evasive answers
Support disappearing for current owners
No communication or timeline at all
Leadership exits layered on top of the silence

Silence paired with transparency is normal. Silence paired with instability is not.

The “Going Dark” Timeline

What is “normal” when it comes to a franchisor going dark? The short answer: anywhere from a few weeks to several months, depending on where the franchisor sells and how much is updated. Yes, I know, it is not a clear-cut answer.

Here is why: States are broken into Non-Registration States, Filing States, and Registration States. Let’s take a look at the differences.

Registration States (13): Approximately 4-12 Weeks

A franchise registration state requires:

The FDD to be filed, reviewed, and approved by a state regulator
Updates every year (and sometimes mid-year if changes are material)
Formal approval before franchise sales can resume

So, what are the registration states?

California*
Hawaii
Illinois
Indiana
Maryland
Minnesota
New York*
North Dakota
Rhode Island
South Dakota
Virginia
Washington
Wisconsin

*California and New York are known as the slowest and most detailed FDD reviews. Many times, these are the last states for a franchise to register in. I have seen these take MONTHS! So, a franchise sales developer is not pressuring you to sign before going dark – they may just not have a clue when it will be available again.

Filing States/Notice Requirements (Not Full Registration): Approximately 2-4 Weeks

These states don’t “approve” the FDD, but they still require notice filings or exemptions that are less restrictive but still regulated. These states include…

Michigan
Texas
Florida
Kentucky
Utah
Nebraska
And others

The Bottom Line

The FDD isn’t designed to convince you to buy a franchise — it’s designed to protect you and provide you with valuable information. You want the MOST UPDATED version of the FDD possible.

The goal in franchising isn’t to find a business with no risk. It’s to find one where the risks:

Match your goals
Fit your lifestyle
Align with your tolerance for stress
Support your long-term exit plan

Understanding the FDD is how informed buyers make confident decisions.

Okay, that was A LOT of information. Want to discuss in more detail? Grab some time on my calendar, and we can debrief. My goal is not to “sell” you on owning a franchise – it is to educate you so you can make the best decision for your future. Your success in franchising is my success!

*I am not a lawyer and will not provide legal advice or representation.

When a Franchisor “Goes Dark” — What It Really Means for Owning a Franchise

Franchise 101

Buying a franchise business isn’t about picking a logo or a brand name (yes, I sound like a broken record). It is about understanding risk, responsibility, and fit. The most important document in that process is the Franchise Disclosure Document (FDD).

Yet many buyers:

Don’t know what the FDD actually contains
Focus on the wrong sections
Get overwhelmed!

Let’s break this down clearly and practically so that you can move ahead confidently when you are considering a franchise for sale.

What Is the Franchise Disclosure Document (FDD)?

The FDD is a legally required disclosure document regulated by the Federal Trade Commission. Its purpose is not to sell you a franchise business — it is to disclose risks, obligations, and realities before you sign anything. When speaking with a franchisor, they must disclose this document, and there is a mandatory review period before you can sign any franchise agreement.

This is called the 14-day rule: Once the franchisor delivers the FDD, typically through DocuSign, the clock starts. You CANNOT sign the franchise agreement, sign any binding agreements, or pay a deposit or initial fee until that time has passed.

There is also the 7-day rule: once you receive the final franchise agreement (written for YOU) after the FDD was delivered, you must have at least 7 calendar days to review the final version before signing.

Who enforces this, you ask? The Federal Trade Commission.

Every franchisor must present the FDD in the same format, consisting of 23 required sections, called “Items.” Whether you are looking at pet franchises, fitness franchises, or any other franchise business out there, you will be given an FDD in the same format.

The FDD Sections That Matter Most (and Why)

While all 23 items matter, not all deserve equal attention. Here’s how to read the FDD like an informed buyer of a franchise for sale — not a hopeful one.

1. Who You’re Partnering With (Items 1–4)

These sections explain:

The franchisor’s history and structure
Leadership experience
Litigation history
Bankruptcy disclosures

What to look for:
Patterns, not perfection. One lawsuit isn’t alarming — repeated disputes, leadership turnover, or unresolved litigation can be when considering a franchise for sale.

2. Your True Financial Commitment (Items 5–7)

This is where many buyers underestimate risk. Here is what to look for in the FDD of a franchise for sale…

Item 5: Initial franchise fees
Item 6: Ongoing royalties, marketing fees, technology fees
Item 7: Estimated total investment range

What to look for:

Is working capital realistic for your lifestyle and household needs?
What assumptions drive the low vs. high investment range?
Are vendors required — and who controls pricing?

Item 7 is not a guarantee. It’s a starting estimate, not your final cost. Remember, the Item 7 is not going to include your first-year salary (if you want to pay yourself while starting), manager salary (if you want to start this with leadership in place), etc. These numbers will get your business open, serving customers with some operational capital in the bank.

3. Control, Territory, and Competition (Items 8–12)

These sections define how much autonomy you truly have when you purchase a franchise business.

Territory protection (or lack of it)
Supplier requirements and rebates
Franchisor support and training
Whether the franchisor can compete with you directly

What to look for:

Vague territory language
E-commerce or national accounts selling into your area
Heavy control without corresponding support

4. Lifestyle Expectations and Exit Strategy (Items 15–17)

These items are often skipped — and later regretted. You will find important information about any franchise business in Items 15, 16, and 17. These are important items to review for fitness franchises, pet franchises, and virtually every industry out there.

Owner participation requirements
Renewal terms
Transfer and resale restrictions
Non-compete clauses

What to look for:
If you can’t clearly explain how you exit, you’re not ready to enter.

5. Performance and System Health (Items 19 and 20)

These two sections should always be reviewed together when you are considering purchasing a franchise business.

Item 19: Financial Performance Representations (earnings claims — optional)
Item 20: Number of franchise openings, closures, and transfers

What to look for:

Are top performers the only ones represented?
Are closures increasing year over year?
Do validation calls support what’s shown on paper?

Context matters more than averages. All of these numbers need to be validated during the next phase of exploration: Validation. You can also read more about the Item 19 in one of my other recent blog posts!

What Buyers Should Focus on Most

If you’re short on time when buying a franchise, here is what you should prioritize in the FDD:

Item 7: Capital and cash runway
Item 11: Ongoing support after launch
Item 12: Territory and competition
Item 17: Exit and transfer rights
Item 19: Earnings logic
Item 20: Franchisee turnover and system health

Check out more Franchise Disclosure Document Blogs:

Should I Get an Attorney to Review the FDD?

What does “Going Dark” mean?

This is A LOT of information to tackle on your own. When you are ready for a full tour guide on this process (for free), let’s schedule some time to chat: Calendar

FAQs About Owning a Franchise Business

What is a franchise owner?

A franchise owner purchases a franchise business from a larger company, called the franchisor. The franchise owner (also called the franchisee) is able to use the branding, marketing, and larger network of the franchise business in order to gain a reputation and customers. However, franchise ownership is highly attractive as it allows you to work for yourself, on your own schedule and your own terms. You will be owning a small business and making an impact on your local community.

How to become a franchise owner?

Becoming a franchise owner – whether you are looking at pet franchises, fitness franchises, or anything else on the market – requires research and dedication. It is imperative to find the right FIT for your needs. Finding a franchise for sale that aligns with your needs and goals as a business owner is the best way to set yourself up for success (and profits!).

Working with The Franchise Fit Company is the fastest and most effective way to make your dreams of becoming a business owner come true. We will help you find the best fit for YOU, setting you up for long-term success and career fulfillment, as well as strong compensation.

How much do franchise owners make?

Franchise owners with different brands make different amounts – but there is no one “best” franchise to own or most profitable franchise to own. Instead, success in franchising comes down to finding the best fit for YOU. If you choose a brand that does not play to your strengths or offer the flexibility and freedom you want, you will not have as much success. You need to select a franchise brand that makes you excited to get out of bed in the morning.

At The Franchise Fit Company, our job is to help you do just that. Having earnings goals is all well and good, and we will take those into consideration when exploring different franchise brands. But the most important predictor of financial success as a franchise owner is finding your FIT.

Franchise Business Basics: Understanding the Franchise Disclosure Document (FDD)

Franchise 101

Before you buy a franchise, you will go through a process of exploring different franchise opportunities. First, we will work together to narrow down which franchise opportunities are best for your needs and goals as a business owner. Then, we will embark on a detailed exploration of a select few franchise opportunities. During this more concentrated stage of the process, you are going to have what is called Validation Calls. So, what are Validation Calls and why are they important?

Validation Calls give you the opportunity to talk to existing franchise owners within a brand’s system before you buy a franchise. You will speak with a variety of different owners to learn more about the experience of owning a given franchise.

What should these Validation Calls cover? Here are some key Validation Calls you should have when it is almost time to buy a franchise.

The “Day-in-the-Life” Conversation

Your first priority is understanding the reality of the role – not the brochure version. You’re not just going to buy a franchise. You’re going to buy a job description for yourself for the next three to ten years. This is the time to understand what is required of the owner to be successful. In particular, does this brand truly FIT your expectations of day-to-day involvement?

Sample Questions to Ask:

“What does a typical day look like for you from start to finish?”
“How much of your time is spent on sales, operations, people management, and admin?”
“What are 2–3 tasks you personally can’t delegate right now?”
“If someone shadowed you for a week, what would surprise them the most?”

What you’re listening for:

Does their day align with how you actually want to spend your time?
Are they mostly in the field? In the office? Networking? Hiring and coaching?
Are they doing work that plays to your strengths or your weaknesses?

If their day sounds like a life you would dread, that is a sign that the model might be fine, but the fit is wrong.

The Ramp-Up & Learning Curve Conversation

The second conversation is about how hard it really is to get from zero to functioning after you buy a franchise.

Sample Questions to Ask:

“How did your first 6–12 months go compared to what you expected?”
“What were the hardest parts of getting started—licenses, hiring, learning the systems, something else?”
“How long did it take before you felt confident and not constantly in ‘figure it out’ mode?”
“If you were starting again, what would you do differently in your first 90 days?”

What you’re listening for:

Are owners consistently saying, “It took longer than I expected”?
Were there surprises the franchisor should have prepared them for?
Does the learning curve match your tolerance for discomfort and chaos during that first year?

You want honest stories, not just timelines. That’s where the truth lives.

The Financial Reality (Without Being Awkward) Conversation

Money questions feel delicate, but you can absolutely have them without asking for someone’s P&L. How you ask questions is important, too. Remember, everyone comes from VERY different backgrounds and has different levels of comfort with money questions. Keep the questions simple.

Sample Questions to Ask:

“Did your actual numbers roughly match what you saw in the FDD or were you above/below?”
“What is your average job ticket price?”
“What are your big monthly expense items to run the business”
“Knowing what you know now, would you have come in with more capital?”
“Have you been able to pay yourself? If not yet, when do you think you will?

What you’re listening for:

Are owners consistently under- or over-performing what’s represented?
Is there a theme around underestimating working capital?
Are they proud and confident talking about the financial trajectory, or hesitant and vague?

You’re not looking for exact dollar amounts for these franchise opportunities. You’re looking for patterns and ranges – and whether this opportunity fits your reality and risk tolerance. Remember, you are in control of making financial decisions for YOUR business. Get the back of the napkin numbers: job revenue, expenses… Boom, you have some margin, and then you know your debt.

The Franchise Support and Relationship Conversation

A strong brand isn’t just a logo. It is also the support system behind you. When you are looking for the best franchise to buy, it is not only about money. It is also about the support you will receive and the relationship with the company behind the franchise opportunities.

Sample Questions to Ask:

“How would you describe your relationship with the franchisor?”
“When you run into an issue, how responsive is the support team?”
“What kind of help do you realistically get with marketing, operations, and training?”
“Have you ever felt like the franchisor wasn’t listening? How did they respond?”
“How much do you engage with other owners?” “Are they supportive?”

What you’re listening for:

Is there a culture of partnership or policing?
Do owners feel heard or brushed off?
Are they excited about where the brand is going, or worried?

If multiple owners use words like ignored, slow, frustrating, pay attention. Support doesn’t magically get better after you sign.

The Customers and Lead Generation Conversation

No leads = no revenue, no matter how great the brand looks on paper. How is this brand going to support you after you buy a franchise in gaining customers for your business?

Sample Questions to Ask:

“Where do most of your customers really come from: corporate marketing, your own networking, referrals, something else?”
“How effective has the franchisor’s marketing been in your market?”
“What marketing activities do YOU do that move the needle the most?”
“Have there been any big shifts in demand or competition since you started?”

What you’re listening for:

Is the brand marketing engine actually helping—or is it mostly on the owner?
Are there specific tactics that consistently work across owners?
Is demand stable, growing, or shrinking in different markets?

This is where you separate hype from what actually drives business. Please note, YOU are responsible for your local marketing. All owners will complain about lead flow – what are they doing about it from all angles is important to understand.

The Challenges, Regrets, and “Real Talk” Conversation

This might be the most valuable conversation you’ll have if you ask the right questions… and then stop talking. Listening to owners talk about the realities of franchise opportunities is absolutely priceless.

Sample Questions to Ask:

“What’s the hardest part of this business that no one prepared you for?”
“Have you ever seriously considered selling or walking away? What triggered that feeling?”
“What do you like least about being part of this franchise system?”
“If someone you loved was considering this brand, what warning would you give them?”

What you’re listening for:

Common pain points: hiring, margins, burnout, competition, support gaps.
Signs of misalignment between what was sold and what was experienced.
Whether the challenges are things you can live with… or not.

No franchise is perfect. You’re not looking for a brand with no problems. You’re looking at whether the problems are acceptable trade-offs for the opportunity.

The “Would You Do It Again?” Conversation

This is the ultimate gut-check question. Before you buy a franchise, this one is the absolute MUST-ASK.

Sample Questions to Ask:

“If you could go back in time, would you buy this franchise again?”
“Would you choose the same brand, or a different industry/model?”
“Would you pick the same territory or market?”
“What kind of person do you think truly thrives in this system?”

What you’re listening for:

Their first reaction—a quick “Yes, 100%” sounds very different from a long pause.
Subtle hesitations like, “Yes, but…” or “Probably, if…” — those “buts” matter.
Their description of who thrives—does that sound like you?

This is where you often get the most honest, distilled perspective: regrets, gratitude, pride, and frustration all in one.

How Many Owners Should You Talk To?

This is a question so many clients ask when looking for the best franchise to buy. As a rule of thumb:

Average: 3–5 owners
Ideally: A mix of…
- High performers
- Average performers
- Newer owners (in first 1–2 years)
- More mature owners (3+ years in)

You want to see the whole spectrum, not just the “highlight reel” you’re introduced to. Remember to have a purpose for each call. If you are trying to talk to everyone to build a case NOT to do it – you are taking the wrong approach. Get your concerns alleviated or proven.

Bringing It All Together

Talking to existing franchise owners is not about getting one perfect answer that tells you “yes” or “no.”

It’s about:

Spotting patterns across multiple conversations
Checking those patterns against who you are and what you want
Confirming whether this franchise is the right fit, not just a recognizable logo

The Franchise Fit Company is here to help you navigate, explore, and ask the right questions. Want to learn more about franchise opportunities? Book time on my Calendar here!

Must-Have Calls Before You Buy a Franchise: Validation

Franchise 101

Franchising has a few stigmas. It is all about fast food, it is not sexy, and it is often seen as a shortcut to entrepreneurship: a ready-made business with brand recognition and a roadmap for success. While that’s partly true, there are plenty of misconceptions that can mislead potential franchisees and even eliminate people from considering this route to business ownership through a franchise for sale.

If you’re thinking about owning a franchise, it’s crucial to separate fact from fiction. Let’s do some myth-busting!

Myth #1: Franchising Is EASY Money, Guaranteed!

Myth: Owning a franchise guarantees a profit, and fast! You will not have to work hard to make money with a franchise for sale, because the advantages of a franchise mean you are already set up to rake in the cash. Franchise ownership is easy!

Truth: Franchising can be profitable, but it’s not a guaranteed cash machine. You still have to work hard, manage people, market your business, and solve daily problems. Think of it as owning a business with training wheels – you’re still riding the bike, and there are bumps in the road. Heck, you can still fall off.

Success takes time, effort, and financial patience. Many franchisees work longer hours than they did in corporate roles, especially in the early years. You get out what you put in! In this situation, you are not sitting at your corporate desk waiting for your bi-weekly paycheck to hit the bank. If you don’t show up, neither does payroll.

Myth #2: You Don’t Need Business Experience

Myth: Your experience does not matter at all when it comes to owning a franchise.

Truth: While many franchises are designed to train newcomers, having business, leadership, or customer service experience can be a huge advantage. You’ll need to make financial decisions, manage teams, and lead operations. Franchises like to train new owners on the concept and business type (where no experience is needed), but you need to have a basic understanding of what levers to pull – even when coaching is provided.

Franchisors give you the system (aka “playbook”), but they don’t run the business for you.

Myth #3: You’re Just Buying a Job

Myth: You’re spending money in order to work every day. How silly!

Truth: It can be like owning a franchise is buying a job – especially if you’re an owner-operator working full-time in the business. But many franchisees grow to own multiple units or hire managers to create more passive income over time. Some love working “in” the business. because they see the fruits of their labor. Others hustle to work “on” the business to grow into a more general manager/executive type role. This goes back to our goal of finding YOUR fit – your involvement will be different based on the franchise of interest.

You’re building an asset, not just trading hours for dollars… That is, if you treat it like a real business.

Myth #4: The Franchisor Will Handle All the Marketing

Myth: You don’t have to do any marketing with a franchise business. Any franchise for sale is already set up for marketing success because of the larger nature of the franchisor.

Truth: While franchisors provide national marketing campaigns and brand tools, local marketing is often up to you. There are advantages of a franchise in terms of marketing, but cornering your immediate market is still in your hands. That means community outreach, networking, promotions, and managing your own local social media. The corporate franchise office is not going to come and sponsor your son’s Little League baseball team. That is the kind of local marketing engagement required of a local owner. Funny, I never thought of a franchise as being “locally-owned” – but IT IS!

Local visibility = local responsibility. Successful franchisees are proactive marketers.

Myth #5: All Franchises Are Expensive

Myth: You need to have piles of cash on hand to even consider owning a franchise. And the most profitable franchise to own? Forget about it, you could never afford that!

Truth: Not all franchises require $1 million to start. There are lower-cost options, especially in the non-brick-and-mortar space: Think home service franchises, pet franchises, wellness franchises, and more. Hundreds of options exist beyond your typical brick-and-mortar business and way beyond fast food. Again, think home service franchises, senior care, education franchises, consulting… the list goes on!

Franchising isn’t just for the wealthy – it’s for the resourceful. Most franchisees finance their franchise through SBA and ROBS offerings.

Myth #6: You Have No Freedom as a Franchisee

Myth: The advantages of a franchise are outweighed by overwhelming control from the franchisor. You won’t really feel like your own boss.

Truth: Franchises come with rules – but you still have autonomy over how you run your day, manage your team, and grow your business. Some industries are stricter than others (e.g., fast food), but many franchises encourage owner creativity, within guidelines. Believe me, no one was in my office telling me how to run my franchise.

You give up some flexibility for brand consistency—but gain support and proven systems.

Myth #7: If a Franchise Brand Is Popular, It Must Be a Good Investment

Myth: Everyone is buying up this one franchise business, so it must be a goldmine. I need to get in on that, too!

Truth: Just because a brand is well-known doesn’t mean it’s the right fit for you or your market. High brand awareness often comes with high fees, saturated markets, and tough competition. The most profitable franchise to own and the best franchise to own are both determined by your individual needs, strengths, and goals.

Due diligence matters more than popularity. Look at unit performance, support quality, and franchisee satisfaction before signing anything. Also known as… Find Your Fit.

Myth #8: Franchising Is Only for Food Businesses

Myth: McDonald’s is the beginning and end of franchising. Owning a franchise means flipping burgers.

Truth: While food franchises are common, franchising spans dozens of industries, including:

Fitness franchises
Home repair franchises
Child education franchises
Health and wellness franchises
Pet franchises (think daycare, grooming, training, and more)
Automotive franchises
B2B service franchises

Many of these services you may have used and NEVER knew it was a franchise. When you start looking, you will be surprised how many are at your fingertips.

There’s a franchise business for nearly everything!

Myth #9: You’ll Be Profitable in a Few Months

Myth: The most profitable franchise will be funding your retirement in sunny Florida in just a few months.

Truth: Some franchisees take a year or more to break even. It depends on the industry, your location, your skill, and how aggressively you market and operate. If you are operating on a part-time, semi-absentee basis, expect it to take longer.

Plan for a slow ramp-up and have enough working capital to get through it. It is HARD – no one said owning a franchise for sale was gonna be easy.

Myth #10: Franchising Isn’t Real Entrepreneurship

Myth: Owning a franchise doesn’t count as owning a business, because you didn’t come up with small business ideas from scratch. Buying a franchise for sale is a cop-out from “real” entrepreneurship.

Truth: You may not be inventing a product from scratch, but you are building, leading, and taking risks like any entrepreneur. You make hiring decisions, manage finances, grow revenue, and adapt to your local market. At the end of the day, that business belongs to YOU – and the success is on YOU too. As the owner, you pull all the levers.

Franchisees are entrepreneurs – just with a head start.

Final FIT Thoughts

Franchising is a powerful business model – but only if you walk in with clear eyes. Don’t let the myths about owning a franchise cloud your judgment or lead you into a situation you’re not prepared for.

Take your time, do your homework, and talk to real franchisees. The more you learn, the better prepared you’ll be to turn your investment into a thriving, long-term business. Better yet? Partner with an experienced franchise coach, like The Franchise Fit Company, to help you navigate, explore, and ask the right questions. We are here to be your third party and extra set of eyes – our goal is to find your right fit, not SELL you a franchise.

The MYTHS About Owning a Franchise

Franchise 101

One of the most common reasons people explore franchise ownership is a single word: Freedom. But here’s the thing – freedom doesn’t mean the same thing to every person. Here are a few direct quotes from my clients related to finding freedom in owning a franchise:

“I am looking for a work/life blend.”

“We are looking for control of decisions, family-time, and flexibility.”

“I want to have something that is OURS, not working from someone else’s dream.”

“How can I do something that resonates with my lifestyle?”

“I am tired of working for the MAN.”

The list can go on and on…

Freedom Is Personal

For some, freedom in owning a franchise means control over their schedule – being able to decide when they work and when they take time off. For others, it is financial independence – earning enough to pay off debts, build wealth, or secure a future for their family. For a few, freedom is creative control – the ability to run the business their way, make decisions without corporate red tape, and steer their own ship.

The mistake? Believing freedom only comes in one form, or that someone else’s definition has to be yours. I post a lot about my personal freedom that this career and franchise business ownership has afforded my family… But what I built may not adhere to the same goals that you or the next business owner have.

My Freedom: A work from home franchise, making my own schedule, defining my success, executing how I want, enjoying farm life and ballfields. What is yours?

Owning a Franchise Gives You Options – But Not Without Trade-Offs

Owning a franchise can absolutely deliver more flexibility and control than most jobs – but it also comes with responsibility. Early on, “freedom” might look more like the freedom to work harder than you ever have before. When I promote freedom in franchise business ownership – believe me, I am not pulling the wool over on hard work. What I am saying is, YOU get to decide.

I can take as much time as I want to be at the farm, riding horses, or daydreaming. But when my foot comes off the pedal, my business reflects that. The key is that no one is looking over my shoulder, determining when I hit the gas pedal… So I can complain about business being down or celebrate success. My decision, my choice, my freedom.

Defining Your Freedom Before You Choose a Franchise Business

Before owning a franchise, it is crucial to determine what freedom looks like for YOU. Freedom and flexibility are some of the main advantages of a franchise… But they look different for every person. So, how do you find out your own definition of freedom in franchise business ownership?

When I work with clients, I ask questions like:

What do you want your day-to-day life to look like?
How many hours do you want to work, realistically?
What’s more important: income potential or time flexibility?
Do you want to be customer-facing or behind the scenes?
Do you want a team to manage, or do you want to be the primary face of the business?

Your answers to these questions shape the types of franchises that will actually deliver the kind of freedom you envision. For example, if you do not want to work weekends, I am NOT going to promote a restaurant-type business (yep, even if you came in asking about a Smoothie King). That does not align with your ideal FIT.

By designing franchise business ownership according to your definition of freedom, we will provide more franchise opportunities for success and even financial outcomes. Why? The business will cater to YOU and what you want your life and role to look like. Just because Billy down the street is looking like he is printing money with a particular franchise business does not mean you will do the same, since the work may not align with your goals and strengths.

Your Freedom, Your Fit

Fit Tip: Freedom in franchise business ownership isn’t something someone else can define for you. It’s a deeply personal choice – and the right franchise should be the one that aligns with your unique vision of independence. Be honest with yourself. It is your scoreboard.

FAQs About Franchise Business Ownership and Freedom

How do franchises work?

A franchise business is part of a proven system run by the franchisor, who determines brand guidelines and structure that the franchisees follow. When you look at owning a franchise, you need to be comfortable with adhering to these guidelines while building your business and embracing the freedom and other advantages of a franchise.

What is a franchise owner?

A franchise owner is someone who owns a franchise business. Normally, they are not the creator of the business – but they believe in the brand and have bought into the company. A franchise owner pays royalties to the franchisor in order to use the brand’s reputation, branding materials, marketing prowess, and more. There are advantages of a franchise to both the owner and the bigger franchisor.

How to become a franchise owner?

Becoming a franchise owner begins with defining your ideal picture of career success. What kind of freedom are you looking for in owning a franchise? Do you want a work from home franchise or one where you will be on the move every day or eve in an office? If you are looking at owning a franchise, let’s talk. I’ll help you find the perfect FIT for you.

How much do franchise owners make?

There is no one answer to the question of how much franchise owners make. It depends on the brand, the market, and their individual levels of success. Franchise owners who work to find the right FIT before owning a franchise are likely to have better success as a franchise business owner and make more money. That’s a fact!

Ready to define Freedom for YOU? Contact me today – no cost, no sales tactics, just learning and exploring together. Talk to you soon!

Freedom in Franchise Business Ownership – Your Definition, Your Path

Personal

When you are researching franchise business opportunities, one of the most anticipated sections of the Franchise Disclosure Document (FDD) is Item 19: Financial Performance Representations (FPRs). This is where franchisors may (but are not required to) share historical revenue, expense, or profit data from their franchise system.

On the surface, it feels like the holy grail of decision-making: Finally, some numbers! But here’s the reality: Relying solely on Item 19 to decide whether to buy a franchise is a mistake.

Additionally, Item 19 is not a good source to compare one franchise business to another. Comparing franchise opportunities based on their Item 19 information is the epitome of comparing apples and oranges!

Sit down for this one… Here is why:

1. Not All Franchisors Provide the Same Information (Not Kidding!)

Franchisors are not required to include Item 19… But they do because it helps sell franchise businesses. Some provide detailed financials, while others give partial or limited data (e.g., gross revenue averages without expenses). You might be looking at a “best-case scenario” instead of a complete financial picture. “It’s like a box of chocolates…”

Fit Tip: Whether you are looking at high or low cost franchise opportunities, Item 19 is just part of the whole picture. If your goal is to find the most profitable franchise for you to own, there are many other sources of data to investigate in order to have a better understanding of a brand’s financial landscape.

2. Averages Tell You What? Not Much.

Many Item 19 disclosures are based on averages, which can be misleading. An “average” can be skewed by a handful of top-performing franchisees, while the majority may be operating below that number. Without context, the average can set unrealistic expectations.

Fit Tip: Talk to existing franchise owners (and not just the ones the brand recommends) to get a better picture of what a day in the life really looks like. The key to success is not just finding the most profitable franchises to own, but also finding the best FIT for you.

3. Expense Data = Absent.

Even when revenue is disclosed, net income is rarely shown. Item 19 often leaves out critical costs of a franchise business (think rent, labor, marketing, or debt service), which directly impact what you take home. High revenues don’t equal high profits.

And don’t forget – what one owner might expense is wildly different from how another owner manages write-offs and compensation. We are over here expensing home improvements, and another person is expensing their new Audi. See my blog featuring net income – that is another story for another day.

4. The numbers are HISTORY!

The numbers in the Item 19 are historical data points. They are not futuristic. They are not current year-to-date. They do not represent the current market landscape. The numbers are completely a reflection of the previous year’s performance by owners that were operating a full calendar year prior to updating the FDD (yearly occurrence).

5. Performance Depends on You – And That Is a FACT!

Yes, I mean to tell you that just because this is a franchise, it does not mean you automatically make money! Sorry. Your results won’t just depend on the franchise brand… the most profitable franchises to own will depend on the location, market size, your management style, and your ability to execute the model too. Item 19 can’t tell you how well you will perform—it only shows what others have done under different circumstances.

Fit Tip: When you are looking at a franchise business, how well others have done monetarily is at the bottom of the list of reasons to choose a certain model. You need to pick a franchise that will let your strengths shine, aligns with your expectations around day-to-day life and flexibility, and more.

6. There is Gold In Validation

Numbers are important, but the real insights come from conversations with existing franchise owners. They’ll tell you what margins look like, what unexpected expenses come up, and how long it took them to cover expenses monthly, operate in the “black” or hit break-even. Validation calls reveal the day-to-day realities that Item 19 cannot capture. In essence, we can break it down to simple math: How much does it cost to run the business monthly (without bells and whistles), and how much does the average ticket bring in? Go ahead… Pull your napkin out and see how many customers you need to break even monthly. Can you do it PLUS some?

As for the validation stage, we can talk later about how to manage validation calls and pull out the data to use in how YOU will operate. Remember, you are going to run the franchise business… And you may not run it exactly like them. Can you get excited about the typical day-in-the-life?

Fit Tip: Item 19 is a useful tool, but it’s only one piece of the puzzle. Don’t let it be the deciding factor. Pair it with thorough validation, market research, and an honest evaluation of your goals and resources – Find Your Fit, and that will show you the money!

Ready to Find Your Fit? Contact us today to get started with your 100% free Franchise Fit consultation. We will help you kick off your journey to pinpointing your perfect fit – whether that is a home renovation franchise, a pet franchise, a fitness franchise, or something else altogether.

FAQs About Franchise Business Opportunities and the Item 19

What is an Item 19 in franchising?

In franchise businesses, “Item 19” refers to a specific section of the FDD (Franchise Disclosure Document). This section covers Financial Performance Representations, or FPRs. Things that could be shared in an Item 19 include earnings information, expense data, revenue, and more. Franchisors are not required to include an Item 19 section in their FDD, but many do, as it helps to sell both high-end and low cost franchise opportunities.

What is the best franchise to own?

The best franchise to own is actually a MYTH. There is no one best franchise – rather, the “best” or most profitable franchises to own are the ones that capitalize on your strengths and skills. If you hate the day-to-day management of a certain franchise, you will not succeed as an owner.

What is the most profitable franchise to own?

The most profitable franchise to own depends on finding the right FIT. When you pinpoint a franchise that lets your strengths shine and plays into your skill set, that is where you will be most successful.

What is the cheapest franchise to buy?

There are many low cost franchise opportunities available in markets like Winston-Salem, Raleigh, Jacksonville, Chattanooga, and many other areas. We can discuss finding a territory and a brand with an affordable entry point into franchising that fits your ideal franchise business profile and everyday needs.

There are affordable businesses in areas like home renovation franchises, pet franchises, fitness franchises, gym franchises, wellness franchises, electrical franchises, plumbing franchises, and many other niches that may not have even crossed your mind!

How much does it cost to buy a franchise?

The cost of buying a franchise varies greatly – and remember, buying a franchise is not just about the initial Franchise Fee. Other startup costs include marketing, hiring, buildouts or renovations, and much more. Typically, the FDD will give you an idea of the costs you will need to account for in the first year or so of getting your franchise off the ground until you break even.

Are you ready to kick off your next chapter as a franchise business owner?

The ITEM 19 and Franchise Business – Deal or No Deal?

Franchise 101