Among the points IFA recommends for investigation are:

  • The type of experience required in the franchised business.
  • The hours and personal commitment necessary to run the business.
  • The track record of the franchisor, and the business experience of its officers and directors.
  • How other franchisees in the same system are doing.
  • How much it will cost to get into the franchise.
  • How much you're going to pay for the continuing right to operate the business.
  • If there are any products or services you must buy from the franchisor and how and by whom they are supplied.
  • The terms and conditions under which the franchise relationship can be terminated or renewed, and how many franchisees have left the system during the past few years.
  • The financial condition of the franchisor and its system.

The Federal Trade Commission ( and IFA ( have many helpful publications and resources. IFA also strongly recommends that you engage an attorney to examine the contract, as well as a professional accountant.