Start With the Franchise Disclosure Document

Every franchise purchase in the United States starts with the Franchise Disclosure Document, or FDD. It is a legal document the franchisor must give you before you sign anything or pay any money. Under the FTC Franchise Rule, you should receive it at least 14 calendar days before you sign a binding agreement or make a payment.

The FDD has 23 sections, called Items. A few deserve extra attention:

Items Worth Reading Closely

• Item 7, Estimated Initial Investment. The franchisor’s estimate of what it costs to open, from the franchise fee to equipment, vehicles, and working capital.
• Item 19, Financial Performance Representations. The only place a franchisor may share financial performance information. If a franchisor gives you numbers that are not in Item 19, ask why.
• Item 20, Outlets and Franchisee Information. How many locations have opened, transferred, or closed, plus contact details for current and former owners.
• Item 21, Financial Statements. The franchisor’s own audited financials, so you can judge the health of the company behind the brand.

Questions to Ask Any Franchisor

• How long is initial training, where does it happen, and what does it cover?
• What ongoing support do owners get after launch, and who provides it?
• How are territories defined, and what happens if I want to grow into more than one?
• Which fees are ongoing, such as royalties, marketing, and technology fees?
• What happens at renewal, or if I ever want to sell or transfer my business?
• How do you decide whether someone is a good fit to become an owner?

Talk to Current and Former Owners

Owners are the best source of truth about any franchise system. Use the contact list in Item 20 and call more than a few. Ask how their launch went, how responsive the franchisor’s team is, what surprised them, and whether they would make the same choice again.

Build Your Advisory Team

Have a franchise attorney review the FDD and the franchise agreement before you sign. An accountant can help you look at the investment, your financing options, and the startup budget for your situation. Their fees are a small price for a clear-eyed second opinion.

How Clean Air Handles the Process

At Clean Air, buying a franchise starts with due diligence: a first phone call with our Director of New Location Development, followed by ongoing conversations and research on your location. If it looks like a fit, you are invited to Discovery Day at HQ in Fort Collins, Colorado, where you meet the support team and see a local franchise at work in the field. Both sides then decide whether to move forward.

See every step, from that first call to opening day, on our become a franchisee page.

Prefer to Reach Out Directly?

Share a few details and our franchise team will follow up.

This is not an offer to sell a franchise. An offer can only be made through our Franchise Disclosure Document.