Franchise Due Diligence Checklist: The Four Things to Consider Before Investing

Franchise Due Diligence Checklist: Four Things to Consider

Making the decision to purchase and operate a franchise is a monumental step for anyone and should not be made without a great deal of thought and research. 

You, first, must be able to understand a brand’s Franchise Disclosure Document (FDD) prior to signing. You’ll also want to consider the lifestyle the opportunity allows you to have. Let’s explore must-have items on your franchise due diligence checklist.

Franchise Disclosure Document

Marked in bold at the top of your franchise due diligence checklist, the FDD must be carefully read and understood to make sure you are making the best investment possible. Law requires that every franchisor provide this document to each prospective franchise owner at least two weeks before a sale can be completed and it includes key information that the interested parties can use to make their decision.

It’s vital you also have a franchise lawyer review the FDD thoroughly. There are 23 items in the FDD and the language is often general and littered with legal disclaimers. An FDD is required so you can be protected as a prospective buyer so make sure it is carefully dissected prior to entering into agreement. 

The Finances

Financial considerations when purchasing a franchise go well beyond the franchise fee you pay at signing and the initial investment costs you pay to get your location open. Franchises do also charge ongoing fees such as royalty fees and ad royalty fees. These tend to be a percentage of your monthly profits and must be paid throughout the life of your agreement.

It’s also important to understand how the overall industry is doing. Recent statistics indicate that the beauty service industry generates over $100 billion in revenue worldwide and the men’s personal care market is projected to hit $276.9 billion by 2030. Skincare services is also on the rise and is projected to generate up to $177 billion by 2025. 

Also, be sure to check out the franchisor’s item 19 of their FDD. This is an optional section that records the average unit volume for all of the reporting stores in the franchise system. This will give you a clear indication of the overall health of the franchise brand.


The life you can create for yourself as a franchisee should also be near the top of your franchise due diligence checklist.

Envision yourself as a franchise owner and make sure it works for the lifestyle you’re trying to attain. If you’re someone who values having downtime to spend with your family or on vacation, be sure to fully understand the workload required to run your business. If it seems like the franchise will require more time than you’re willing to give, it may not be the right fit for you.

A great way to evaluate this is by talking to existing franchisees within the system. Ask them how much time they spend on a weekly basis working on their business and how much time they get to enjoy to themselves. Current franchisees living the business will be able to give you incredible insight as to what being an owner is really like.

Franchise Support

How the franchise’s leadership team treats and supports their franchisees is another important detail to investigate. Do they give each franchisee the proper attention? Do they support you with extensive training and back you with marketing efforts?

You need to make sure you’re not on your own once you sign on the dotted line. A benefit of being part of a network of franchises is the vast support system you receive and the perks that come with that.

Franchises like MY SALON Suite provide a strong support system to guide you through difficult times and train their franchisees in every aspect of what it takes to recruit qualified salon professionals. They also provide guidance on how to run a successful salon suite franchise and have franchise business coaches available to reach out to at any time to answer questions or provide support.

Franchise with MY SALON Suite

MY SALON Suite is a sound investment for your financial future. Our franchise owners benefit from the financial security of owning a business with a proven track record. We’ve got more than 270 locations across the country and even more in development. MY SALON Suite brings beauty professionals together, across a wide variety of specialties, providing space to be yourself, build your business, and benefit from a creative community. And the best part? Many of our franchise owners only spend about 10 hours a week on their business. This gives them time to enjoy other business ventures, retirement, or their full-time job while reaping the reward of a solid passive income opportunity.

To learn more about our franchise opportunity, fill out this form, and one of our representatives will be in touch about how you can become a franchise owner