Franchise Checklist: You need a framework

Objective starting point

Have you ever had a fitness goal “to be healthy” or “to be strong”? You probably fizzled out because what does that mean? Those are useless measures of fitness. If you said, “I want to be able to run 5 miles in 40 minutes or less by June” then you have a higher likelihood of achieving that goal. You can break it into mini-goals. You can read about how to train at running. You can be precise and measure your progress.

We need a framework like that for franchise research. If you just say “I want to find a franchise I think I will be good at and will make money,” you will never find a franchise. Or you will just pick the one with the sales rep you like the most even though they have nothing to do with the operations of the franchise.

That is why you need to write down your goals and be specific. “I want to make $250k in profit in 5 years while working banker hours”. Now that is something we can work with! We can break it down- how many other franchisees that have been around for 5 years are making that much? How did they do it? How many territories do they have? Is the training in place to turn your into a business owner making that much?

There is obviously more to the research than that but if you can clearly outline the amount you want to make, how much you want to work, and in what time frame, you can have pretty clear go/no go criteria when it's time to decide if you want to start the franchise or not.

Here is the checklist I would use:

1. Personal Readiness

• Have I involved my spouse/partner/family in this decision?

• Am I mentally and emotionally ready to run this business full-time?

• Do I have a realistic plan for the first 12 months, including cash flow gaps and lifestyle changes?

• Am I prepared for uncertainty, especially during the ramp-up period?

• Do I want to do the actual day-to-day work this franchise requires?

2. Financial Preparedness

• Do I have enough capital for startup + working capital + personal runway?

• Have I seen real P&Ls from multiple franchisees and modeled a conservative, realistic projection?

• Do I have a plan for covering personal expenses until the business is self-sufficient, to include a salary for myself?

3. Franchise Unit Economics

• Do I understand and believe the business model?

• Have I stress-tested my breakeven point and cash flow under multiple scenarios?

• Have I compared my projections to Item 19 and franchisee data?

• Do the margins make scaling realistic?

• Can I make what I want in the time frame I want?

  • Is the middle of the pack owner doing this?

• Can I reach my goals without working more hours than I’m willing to commit?

  • Have I seen real schedules from average-performing owners?

Franchisor Quality

• Have I evaluated the franchisor’s leadership, culture, and support systems?

• Are they transparent, responsive, and supportive?

• Are there any red flags in the FDD or litigation history?

• Is the training good enough to get me from where I am now to in business?

• Is the support good enough to answer all my needs quickly?

• Is this franchise proven to acquire customers?

• Is this franchise proven to be able to hire employees?

• Is the franchisor still innovating and improving their systems?

Franchisee Validation

• Did I talk to both top and bottom performers?

• Did I ask tough questions and get honest answers?

• Would I want to be part of this franchisee community long-term?

• Do franchisees generally say they’d do it again?

6. Market Fit

• Have I done local market research (demographics, competition, demand)?

  • Is the market big enough in my area to hit my goals?

• Have I tested interest in my area (e.g. calling leads, running ads, mystery shopping competitors)?

• Do I have a territory advantage or headwinds?

• Is it in a large industry that is growing faster than competition is entering?

7. Personal Fit With the Business

• Am I comfortable doing the core activities (sales, hiring, ops)?

• Does this business align with my strengths, values, and goals?

• Would I be energized or drained by what success actually requires here?

• Do I like the operational team and can see myself working with them for the next 10 years?

8. Support Systems in Place

• Have I reviewed my model with a CPA?

  • Do they believe I’m financially prepared for this risk?

• Does a lawyer think the franchise agreement is drafted fairly?

• Do I have a clear onboarding and launch plan?

9. Exit Potential

• Is this business building real equity or just cash flow? Am I ok with whatever it is?

• What is my exit plan and has others done this?

• If my plan is to sell, are there buyers for this franchise?

• If my plan is to put a manager in place, can one unit financially support a manager and pay me what I want? If not, how many units do I need to get to? Have other owners gotten to this point yet?

• If I want to sell for a big exit, how many units would that require and are there owners who own that many units right now?

10. Final Gut Check

• Do I feel calm, clear, and confident—not desperate or rushed?

• Does it line up with my skills?

• If a good friend was making this choice, would I advise them to go forward?

• If this fails, would I still be proud of how I made the decision?

That is really it. Everything else is getting to an answer on these questions and ensuring the majority of franchisees I speak with all are saying the same thing.

Leap already

Once you have these questions answered, it is time to leap. Just like there are probably hundreds of other people who would have made you equally as happy as your current spouse if you married them, at some point you have to say this one is mine and move forward. You can’t date forever because either you will lose interest or your interest will move on to someone who will commit.

You started this process because you want own a business. The business you have found checks all your boxes. It is time to leap.