What to ask franchise owners before you buy
Every franchisor must hand you a list of its owners. Most buyers never call them. Here is who to call, what to ask, and what the filings say you should check first.
The Franchise Disclosure Document (FDD) is the official sales paper every franchisor must give a buyer. Item 20 of it counts how many outlets opened, closed, were terminated or changed hands. The back of the FDD lists owners by name, with phone numbers. That list is the best free research you will get. Use it.
Start with Item 20: what the table shows
Item 20 has a status table. For each year it shows the outlets at the start, the ones that opened, and the ones lost by termination (the franchisor ended the deal), non-renewal, reacquisition (the franchisor took the outlet back), or ceased operations (closed for other reasons). A second table counts transfers, which is owners selling to a new owner.
| Franchise | Franchised outlets at start of 2025 | Opened in 2025 | Lost in 2025 | Sold to new owners in 2025 | FDD page |
|---|---|---|---|---|---|
| The Joint Chiropractic | 842 | 70 | 16 terminated, 11 ceased operations | 22 | pp. 53, 57 |
| Goldfish Swim School | 172 | 23 | 1 terminated, 2 reacquired by franchisor | 8 | pp. 63, 67 |
Figures are for calendar 2025 from each company's 2026 FDD. "Lost" counts franchised outlets only; both companies also own some outlets themselves.
What the numbers tell you to ask
Terminations are a question, not a verdict. The Joint's filing shows 16 terminations in 2025 after none in 2024 (page 57). A jump like that has a reason. It could be unpaid fees, closed clinics, or a clean-up. Ask the franchisor, and ask owners in the same state.
Transfers can mean owners wanting out. The Joint recorded 24 transfers in 2023, 41 in 2024 and 22 in 2025 (page 53). Goldfish recorded 4, 1 and 8 (page 63). A transfer is not always bad, since some owners retire. But call the sellers and ask why they sold and what they got.
A closed outlet is not on the owner list. The list in the FDD is of current owners and of owners who left in the last year. Owners who left earlier are not on it. That is why you ask the current owners who they know that quit.
The questions to ask
- What did you expect to earn, and what did you actually take home? Compare their answer with the Item 19 figures in the FDD. A gap is the thing to understand.
- How long until you paid yourself a wage? Ask for months, not "a while". Then ask what money you lived on until then.
- What did the opening cost beyond the fee in Item 5? Build-out, equipment, and the cash you needed to cover early losses are where budgets break.
- What do you pay the franchisor each month, all in? Royalty, ad fund, software and tech fees. Add them up and compare with Item 6.
- What does the franchisor do that you could not do alone? Training, site help, and buying power are what you pay royalties for. Ask if you get them.
- Would you buy this franchise again, at today's price? Listen to the pause before the answer.
- Do you know owners who left? Who are they? Former owners are not on the list for long. Ask each current owner for names.
- What happens when you disagree with the franchisor? Ask about the last real dispute, and how it ended.
How many owners to call
Call at least five. Pick some near you, some in the oldest part of the system, and at least one who left or sold. Take notes. Ask each the same questions so you can compare. Then bring what you learned to a franchise lawyer before you sign.
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