I read an interesting article on Why Some Franchise Buyers Almost Always Make Mistakes written by franchise lawyer Michael Garner. Michael recommends digging into the information contained in Item 20 which consists of the five tables that show the status of the outlets within the system. The article is well worth the read.

My experience is that prospective franchisees will come to me very excited with a great story of how a franchisor is expanding and growing. But often, the tables in Item 20 paint a different picture. A story where franchise locations are being closed or transferred (a red flag) or where company-owned locations are closing. It is important not to fall into the sales hype. See the facts for yourself by investigating Item 20 carefully.