Franchising is booming.

Private equity firms are snapping up franchisors faster than ever. Recently, we have seen Jersey Mike’s secure a massive $8 billion private equity deal and Freddy’s Frozen Custard and Steakburgers now reportedly exploring a sale. The stakes are high, the money is flowing, and the pace of change is staggering.

But here is the catch: your Franchise Disclosure Document (FDD) due diligence and franchise agreement review have never been more critical.

The Allure of Franchising

Franchising has always been a unique path to entrepreneurship. For aspiring business owners, it offers the ability to plug into a proven system, leverage brand recognition, and access the support of an established organization. That is why savvy investors and budding entrepreneurs alike flock to franchises, hoping to stake their claim in a growing market.

This appeal is amplified in the current landscape. Private equity sees opportunity, and for good reason. These firms excel at scaling businesses, refining operations, and driving returns. When private equity enters the picture, growth often accelerates—but so do risks for franchisees.

It is a high-stakes game.

The Problem Nobody Talks About

Here is one rule to live by: never rely on oral promises from a franchisor.

Why? The franchisor you shake hands with today might be sold to private equity tomorrow. And let me be clear—private equity has zero obligation to honor any handshake deals.

Imagine this: You meet with your franchisor’s representative, and they promise you exclusive territory rights or flexible payment terms. It feels great. You trust them. But that promise does not make it into the franchise agreement. Six years later, private equity steps in, restructures operations, and invalidates any unwritten assurances.

Legally, they can do that. And ethically? That is up for debate.

In fact, even before such a sale, most franchisors’ lawyers will flat out say: “If it isn’t in the agreement, it doesn’t exist.”

Let that sink in.

The Solution is in the Details

This is why your FDD and franchise agreement are tools for protecting yourself.

The FDD is your roadmap. It details the franchisor’s financial health, legal history, obligations to franchisees, and—most importantly—your rights as a franchise owner. Yet many franchisees skim it or, worse, rely on a franchisor’s verbal reassurances.

Do not make that mistake.

Scrutinize the franchise agreement, too. This document is the final word on your relationship with the franchisor. Every promise, every protection, every potential risk must be spelled out in black and white. If it is not, you are exposed.

And let us be real: in this booming M&A environment, your diligence is not just about understanding the deal you are signing—it is about anticipating the deal the franchisor might sign tomorrow. Private equity firms are not in the business of protecting legacy relationships; they are in the business of maximizing returns.

That means everything from royalties to operational requirements could change once they are in charge. If your agreements are vague or reliant on good faith, you are the one left holding the bag.

Protect Yourself

Here is the bottom line: in franchising, what is written in ink is what stands. Everything else? It is just noise.

The private equity boom is not slowing down, and neither is the pace of franchising M&A activity. As an entrepreneur, you must rise to the occasion. Read the FDD. Scrutinize the franchise agreement. Seek expert guidance such a franchise lawyer and accountants.

Because in this high-stakes world, your due diligence is not just a box to check—it is the shield that protects your investment.

Franchising is booming.

Are you ready?