
In this post, I’m going to show you exactly how to buy a franchise in 2025. But first, I have a question for you.
Are you dreaming about being your own boss but worried about starting from scratch?
If you answered “yes,” you’re not alone.
The fact is, franchise ownership continues to be an attractive path to entrepreneurship, offering a blend of independence and proven business systems. But here’s the thing – buying a franchise isn’t simple.
Instead, it’s a complex decision that requires careful consideration, thorough research, and smart planning. Especially if you want to buy any of the top franchises around.
In addition, when it comes to making money, franchise ownership is a long-term play. Why is that?
Because it takes time to grow a business. You shouldn’t expect to replace your income in the short-term.
But, if you play your cards right, it could be worth it.
The Reality Check: Is Franchise Ownership Right for You?
Let’s start with some straight talk: franchise ownership isn’t for everyone. In fact, it’s not for most people.
So, before you start dreaming about grand openings and massive profit margins, you need to take a hard look in the mirror and ask yourself some tough questions.
How to Buy a Franchise in 2025: The Self-Assessment Challenge
One of the things you need to do is take a hard look at yourself.
Are you a rule follower?
I hope so. Because there are lots of rules in franchising.
Note: Now would be a great time to take my Free Franchise Compatibility Quiz. Why?
To help you determine if you are aright for franchise ownership.
Then, you need to take a look at your most dominant personal traits and your lifestyle goals.
Next, you need to decide on the things you want to do when you’re a franchisee…your preferences for the actual work you want to be doing on a daily basis.
The next step is to take a financial snapshot of where you are.
Use My Free Net Worth Calculator
Finally, you need to know what to expect, financially, when you sign your Franchise Agreement and start your franchise business.
With that in mind, here are a few specific things to think about in those 3 areas.
Financial Readiness

- How much money do you really have to invest?
- How much can you afford to lose?
- Do you have additional income to cover personal expenses until the franchise becomes profitable?
- Have you considered not just the franchise fee, but ongoing royalties, marketing fees, and working capital?
Personal Skills and Traits
- Are you comfortable following a strict rulebook? (Remember, franchising is entirely rule-based)
- What relevant experience do you bring to the table?
- How do you handle stress and uncertainty?
How to Buy a Franchise in 2025: Lifestyle Alignment
- Are you ready to potentially work longer hours than you do now?
- Can you accept having a company (the franchisor) overseeing you, even though you’re a business owner?
- Does your family support this significant life change?
That’s some serious food for thought, eh?
Let’s continue.
The Step-by-Step Journey to Franchise Ownership
Step 1: Research and Initial Exploration
Think of this phase of purchasing a franchise as your reconnaissance mission.
In short, you’re gathering intelligence about different franchise opportunities that match your interests, skills, and budget.
But don’t just stick to online research. Here’s what savvy franchise buyers in 2025 need to do:
- Attend franchise expos (but do your homework before you go)
- Use franchise directories and industry publications
- Network with current franchise owners in different systems
- Study market trends in your target industry
Step 2: How to Buy a Franchise-Your Financial Foundation
This is where rubber meets the road. You need to get crystal clear on your numbers:
Investment Range Considerations:
- Initial franchise fee
- Equipment and inventory costs
- Real estate and leasehold improvements
- Working capital for at least 6-12 months
- Marketing and advertising fees
- Ongoing royalty payments
Financing Options:
- SBA loans
- Traditional bank loans
- Business lines of credit
- Retirement account rollover (ROBS)
- Personal assets or savings
Here’s a list of SBA Preferred Lenders, state-by-state.
Pro Tip: Create a detailed business plan. It’s not just for the bank – it’s your roadmap to future success and a reality check on your financial projections.
Step 3: The Deep Dive – Understanding the FDD
The Franchise Disclosure Document (FDD) is your new best friend.
Plus, it’s a legally required document that contains 23 items of crucial information about the franchise opportunity. Here’s what to focus on:
Key FDD Sections to Scrutinize:
- Items 1-4: The franchisor’s background, business experience, litigation history, and bankruptcy records
- Items 5-7: All costs involved, from initial investments to ongoing fees
- Item 19: Financial performance representations (if provided)
- Item 20: Statistics about existing franchises, including turnover rates
- Item 21: Financial statements of the franchisor
Remember: The FDD isn’t light reading – it’s a complex legal document.
But as my dad told me, “The FDD is not the business. It’s ink on paper.”
This brings us to our next crucial step.
Step 4: Building Your Professional Team
Don’t try to go it alone. You need experts in your corner:
- Franchise Attorney
- Reviews and explains the FDD
- Potentially negotiates better terms in your franchise agreement
- Protects your interests throughout the process
With those things in mind, I encourage you to watch this short video about the importance of hiring a Franchise Attorney-no matter what:
2. Small Business Accountant
- Analyzes franchisor financial statements
- Helps develop realistic projections
- Advises on tax implications/strategies
For example, how you’re going to structure your company.
Note: it’s not difficult to set up an LLC or an S-Corp. Heck, my own business is an S-Corp. Thank goodness!
With that in mind, there are a few highly-specialized companies that can help you set your business up the right way.
3. Financial Advisor
- Assists with funding strategies
- Evaluates impact on personal finances
- Helps structure the investment
Step 5: How to Buy a Franchise: Franchise Research
In my experience as a Franchise Ownership Advisor, this is where many prospective franchisees tend to rush through – but it’s arguably the most important step. Here’s your franchise opportunity research checklist:
Talk to the folks at franchise headquarters
And ask them these 10 must-ask questions during your first call:
1. How long has the company been in business?
2. How long has the salesperson been with the company?
3. How many franchise units does the company currently have?
4. What does the franchisor look for in a franchisee?
5. What is the total initial investment including the franchise fee?
6. Is there territory available in my area?
7. Does the franchisor offer financing?
8. What is the failure rate?
9. How long will it take to go through everything I need to know and make a decision?
10. What does the future hold for this franchise concept?
After this call, it’s up to you to determine if the opportunity you’re looking at is interesting enough for you to keep investigating.
And, you need to decide if you can see yourself as the Owner of the franchise…as a successful owner. If so, keep going. They’ll share next steps.
Or
If after your 1st call, the opportunity is not what you thought it was, or just doesn’t “feel” right,” move on to something else. There are lots of other choices.
Call And Visit Franchisees!

Please read this entire section.
Then follow the directions…closely.
Talk to Current Franchisees:
- Ask about their daily operations
- Discuss real profit margins
- Understand their challenges
- Learn about their relationship with the franchisor
- Visit one or two of them in-person, at their business
Tip: To find franchisees to call, just look in the Franchise Disclosure Document (FDD) you’ll be receiving. The names of every single franchisee are listed in it.
Ask Franchisees These Questions
1. Why did you choose to purchase this particular franchise?
The answers you get from the franchisees will either reinforce your reason (s) for choosing the franchise, or provide even more of them.
2. Are you happy with the support you’re getting?
Every franchisor in the world mentions “great support” as part of the reason you should buy their franchise. It’s easy to say in the heat of the moment…when they’re trying to convince you to buy their franchise. But, do they really provide it? You need to find out. Ask the franchisees!
Tip: Ask them about the technology the franchisor provides.
The franchisees will tell you if they’re getting good support or not. Having a support system in place-a great support system, is crucial to your success as an owner. Plus, you’re paying for it in the form of royalties each and every month.
The Competition
3. What’s your competition like?
I love hearing answers to this question.
You may have a good idea of who the competitors are, because you ran across them as you searched for opportunities online.
But, there may be other competitors you aren’t aware of. Wouldn’t you like to know who they are before you become a franchise owner? Ask!
4. What is your favorite part of the business?
It’s important to know that the answer (s) you get may end up securing the deal-in your mind.
No one wants to be involved in a business they don’t like…they aren’t enthusiastic about.
Ask this question of the franchisees so you can find out what gets them out of bed in the morning.
Don’t you want to know what will possibly get you out of bed each morning as the Owner of the franchise business?
5. What do you wish you would have known before you acquired this franchise?
Hardly anyone asks this one.
This research question is powerful. It’s what I call a “money question.”
As a matter of fact, the answer you get here may end up helping you determine if you should write a check for the franchise fee to the franchisor or not.
In addition, the answer may bring up some something you haven’t thought of.
This is your opportunity to get some real inside information. Use it to your advantage. In some cases, the answer you get may end up helping you make money faster. Let’s continue.
Discovery Day:
- Travel to franchise headquarters
- Meet the franchise team in person
- Observe the corporate culture
- Ask detailed questions about support systems
- Gauge the transparency of the organization
Check out my Discovery Day secrets. Also…
For a completely detailed, proven, step-by-step way to research any franchise opportunity you’re interested in, I encourage you to invest a few bucks on my Franchise Research Guide. You’ll be glad you did!
Step 6: How to Buy a Franchise: Franchise Location and Territory Analysis

Next, if your franchise requires a physical location, this step is critical:
Location Considerations:
- Demographics of the area
- Competition analysis
- Foot/vehicle traffic patterns
- Accessibility and parking
- Lease terms and conditions
- Territory protection rights
A Powerful And Free Resource Just for You
Did you know that free local area statistics and along with it, entrepreneurial counseling, may be available only a few miles away from your home?
That’s right; it’s called The Small Business Development Center (SBDC).
In essence, it’s a resource that provides assistance to small businesses and entrepreneurs. And they offer a wide range of services, including:
- Business Planning: Help with writing business plans and strategies.
- Funding Assistance: Guidance on obtaining financing and grants.
- Market Research: Support in analyzing market trends, foot and vehicle traffic and competition.
- Training and Workshops: Educational programs on various business topics.
- Consulting Services: One-on-one consulting to address specific business challenges.
SBDCs are typically funded by the Small Business Administration (SBA) and often collaborate with local universities, economic development organizations, and other entities to provide comprehensive support to future and existing small businesses.
Step 7: How to Buy a Franchise: Making Your Franchise Buying Decision
Now comes the moment of truth. Before moving forward:
- Review Your Checklist:
- Have you thoroughly reviewed the FDD?
- Did you speak with enough current franchisees?
- Are you comfortable with the financial commitments?
- Do you fully understand your obligations?
2. Consider the Following Red Flags:
- High franchisee turnover rates
- Lack of transparency from the franchisor
- Unrealistic earnings claims
- Excessive litigation history
- Weak financial statements
But before you sign…here are some things that can help reduce your risk.
How to Buy a Franchise in 2025: Risk Mitigation Strategies
Smart franchise buyers know that success isn’t guaranteed. Here’s how to protect yourself from financial harm:
- Maintain a Generous Financial Buffer
- Keep additional capital reserves
- Have a backup plan for personal expenses
- Consider business insurance options
2. Understand Your Rights
- Know the termination conditions
- Understand your franchise renewal terms
- Be clear on transfer costs/rights
- Learn about trademarks
3. Document Everything
- Keep records of all communications
- Save copies of all agreements
- Maintain detailed financial records
Before I continue this post on how to buy a franchise, here are some things I’ve learned in my 24+ years in franchising.
You need to protect yourself.
That means, your interests need to come first here. Period. Don’t look at this in any other way. Take your emotions out of the equation.
Another things is to not rely solely on any financial claims made by a Franchise Consultant/Broker/Coach or anyone at franchise headquarters, unless you see them on the FDD. Then, verify those claims with the franchisees you talk with.
P.S. I’m talking about any claims made. Like:
“You’d be buying a semi-absentee business. You’ll hardly be there at all.”
“It’s easy to find a location.”
Etc.
One more thing.
If the franchisor does provide earnings claims, you need to understand the methodology behind the numbers. Completely.
The Bottom Line: Making Your Final ‘Yes’ or ‘No’ Decision
Buying a business franchise in 2025 is a significant decision that requires careful consideration, thorough research, and professional guidance. Remember these key points:
- Take your time with the process – rushing leads to mistakes
- Don’t let emotions drive your decision
- Focus on facts and verified information
- Again, verify everything
- Keep your long-term goals in mind
Signing The Franchise Agreement
If you don’t think you’ll be nervous when you have pen in had, ready to sign your Franchise Agreement, watch this video.
Got it?
Moving Forward: Your Next Steps
Now that you know how to buy a franchise in 2025, here’s what to do next:
- Start your self-assessment process
- Begin researching franchise opportunities that interest you
- Create a preliminary budget
- Contact franchisors for initial information
- Start building your professional team
Your Franchise Business Opportunity Journey
Remember, the journey to franchise ownership is a marathon, not a sprint.
That means you need to take each step carefully, do your homework, and not be afraid to ask tough questions. Your thorough preparation now will pay dividends in your future success as a franchise owner.
With that in mind, the franchise landscape in 2025 offers exciting opportunities, but success requires careful planning, thorough research, and realistic expectations.
So, take these insights, and then make an informed decision about your franchise future.
Again, by following this guide on purchasing a franchise, and maintaining a balanced perspective between enthusiasm and careful analysis, you’ll be well-equipped to make a smart decision about franchise ownership.
That said, are you ready to take the first step toward becoming a franchisee?
If so, start with the self-assessment process today, and remember – the best investment you can make is in thorough research and preparation before making your final decision.
Finally, remember that this isn’t just a business transaction – it’s a decision that could change your life. Make sure you’re ready for that change.