
Here’s a sobering reality: Most of today’s franchise buyers are making decisions worth hundreds of thousands of dollars based on incomplete information. Translation: they’re essentially flying blind into one of the biggest investments of their lives.
So, what is the biggest franchise research mistake currently being made?
In my experience, it’s aspiring franchise owners not calling enough current and former franchisees.
So, if you’re looking to become the owner of a franchise business, read this post so you won’t make the same franchise research mistake.
The Numbers Don’t Lie
Do you think you’re being thorough by calling 3-4 franchisees? Think again. That’s barely scratching the surface.
Here’s what smart buyers actually do: they call 12, 15, sometimes 20+ franchisees before signing on the dotted line. Why does this matter so much?
Because every franchisee has a different story, faces unique challenges, and operates under varying market conditions. The rosy picture painted by the franchisor’s carefully selected franchisee references* might not reflect your future reality.
*Most franchise representatives give you names and phone numbers of franchisees who are successful to varying degrees. Nothing fishy there.
But if you only call them, you’re not getting an accurate picture of what franchisee happiness and earnings are system-wide. It’s a big mistake.
What You’re Really Missing by Making This Franchise Research Mistake
When you only talk to a handful of franchisees, you’re missing critical intelligence that could save you from disaster. Like:
Market Variations: That franchisee thriving in downtown Chicago might have completely different economics than someone in suburban Indianapolis. Demographics, competition, and local regulations create vastly different operating environments.
Seasonal Patterns: Some franchisees experience dramatic seasonal swings that aren’t obvious from annual averages. The ice cream shop owner will tell you about their December struggles that the frozen yogurt franchise corporate presentation may have glossed over.
Hidden Costs: Corporate might mention “additional fees,” but franchisees will break down exactly how those fees add up and what those charges actually cost them monthly. Equipment maintenance, software updates, mandatory renovations. The real numbers come from real operators. Let me repeat that.
The real numbers come from real operators.
Franchise Owner Support Reality: How responsive is corporate when your point-of-sale system crashes during rush hour? When you need emergency inventory? When a competitor moves in next door? You’ll only learn this from franchisees who’ve lived through these situations.
“From The Franchisor’s Perspective” Problem
Here’s the thing about franchise development representatives: they’re salespeople. Their job is to get you excited and signed up. They’re not lying (they better not be), but they’re presenting best-case scenarios.
Franchisees, on the other hand, are living your potential future s an Owner.
That means they’ve navigated the learning curve, dealt with unexpected challenges, and figured out what actually works in the real world versus what works in the corporate manual. And what’s presented at Discovery Day.
The Right Strategy Will Help You Avoid a Franchise Research Mistake
Start with the Franchise Disclosure Document’s Item 20 – the list of current and former franchisees. This is your roadmap to the truth.
Use it to call franchisees from different regions, different opening timeframes, and definitely include some who’ve recently sold or closed their locations. Former franchisees often provide the most honest perspectives since they have nothing to lose.
Note: Former franchisees are notoriously difficult to locate. Use your favorite search engine or AI to get their contact information.
And when you do connect with franchisees-current or former, ask the tough questions:
- What surprised you most about the business?
- What would you do differently?
- How accurate were the corporate projections?
- What’s your actual take-home after all expenses?
- Are you happy with your decision to buy?
The Cost of Franchising Research Shortcuts
Let’s be brutally honest about what may happen when you skip the franchise research step I’m talking about. Let’s talk worse-case scenarios.
For instance, you might discover six months after opening that:
- The “average” revenue figures include several outlier locations that skew the numbers
- Corporate support is great until you actually need help
- Local market conditions make their business model nearly impossible in your geographical area
- Hidden operational challenges eat into profits more than you anticipated
Your Business Research Framework
Smart franchise buyers treat this like the major business investigation it actually is.
Specifically, they create spreadsheets tracking responses, identify patterns across different markets, and build realistic financial models based on real operator experiences rather than corporate projections.
Additionally, they understand that calling 20 franchisees might take 30 hours of phone time, but that investment could save them from a $300,000 mistake.
The Reality Check
Here’s your wake-up call: If you’re not willing to invest serious time researching franchisee experiences, you’re probably not ready for franchise ownership.
That’s because running a successful franchise business requires the same thoroughness you should be applying to your pre-purchase research.
Bottom Line?
Franchise ownership can be incredibly rewarding, but only when you go in with eyes wide open. That means avoiding the franchise research mistake 99% of aspiring franchisees make.
Experience shows me that the franchisees who succeed are typically the ones who did exhaustive research upfront and understood exactly what they were signing up for.
So, don’t join the 99% who wish they’d asked more questions.
Your financial future depends on the conversations you have today with people who are already living the reality you’re considering.
Make those calls. Ask the hard questions. Like the dozens I include here.
Your bank account will thank you later.
FAQ’s
The magic number isn’t set in stone, but successful franchise buyers typically contact 15-20 franchisees minimum. Think about it this way: you’re making a six-figure investment based on conversations that cost you nothing but time. Call franchisees from different regions, different opening years, and different performance levels until you start hearing consistent patterns in their responses.
How responsive is corporate support when you need help? What’s your biggest operational challenge? If you had to do it over, would you buy this franchise again? What’s your actual monthly take-home after all expenses? How accurate were the franchisor’s financial projections? What unexpected costs surprised you?
Absolutely. Former franchisees often provide the most honest feedback since they’re not worried about maintaining relationships with corporate. The Franchise Disclosure Document lists franchisees who left in the past three years. These conversations can reveal deal-breakers you’d never learn from current operators.
If multiple franchisees avoid your calls, that’s actually valuable information. Successful franchise systems typically have operators who are happy to discuss their experiences. Widespread reluctance to talk might indicate systemic problems within the franchise network.
Pay attention when you hear: inconsistent revenue stories, complaints about corporate responsiveness, mentions of unexpected fees, difficulty reaching profitability targets, or high local competition that corporate didn’t mention. If multiple franchisees mention the same problems, take it seriously.
About the Author
The Franchise King®, Joel Libava, is a leading franchise expert, author of "Become a Franchise Owner!" and "The Definitive Guide to Franchise Research." Featured in outlets like The New York Times, CNBC, and Franchise Direct, Joel’s no-nonsense approach as a trusted Franchise Ownership Advisor helps aspiring franchisees make smart, informed decisions in their journey to franchise ownership. He owns and operates this franchise blog.
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