A franchise buyer’s checklist · July 29, 2026

Read these 10 FDD red flags before you sign anything

A Franchise Disclosure Document is 20-plus items of fine print, and the sales process is built to move you past it. Here are the ten places the document most often disagrees with the pitch — check each one before you sign the franchise agreement.

None of these means a given franchise is a bad deal. Each is a place where the document, not the salesperson, should give you the answer — and where a good franchisor’s answer holds up in writing.

1. Item 6 — the ongoing fees, totaledAdd the royalty, brand/ad fund, technology fee, and any monthly minimum. Then multiply across ten years at your realistic revenue. The entry fee is the headline; this is the business model.
2. Item 19 — and whether it even existsIf there is a financial performance representation, ask for the median, not just the average, and which units are excluded. If there is no Item 19 at all, every revenue number you have heard is, by rule, not something you can rely on.
3. Item 20 — units opened vs. closedRead the tables for closures, transfers, and terminations, and the count of franchisees who left. A large gap between units sold and units open is a question worth asking out loud.
4. Item 3 — litigation historyLawsuits involving the franchisor and its principals live here. Read them; they tell you how the company behaves when a relationship goes wrong.
5. The real all-in (Item 7) vs. your capitalItem 7 is an estimate. Add working capital to break-even and a cushion, and compare against what you can actually lose without pain.
6. Who owns the brand and the customer list at exitIf you leave, do you keep the location goodwill and the customers you built? In most franchise structures, you do not.
7. Territory: exclusive, or merely ‘protected’?Read the exact grant. ‘Protected’ often has carve-outs for the franchisor’s own channels, including online.
8. Transfer and renewal termsWhat does it cost, and whose approval do you need, to sell or renew? These terms decide whether you built an asset or a job.
9. Required purchases and approved suppliersIf you must buy from the franchisor or its designees, that mark-up is an ongoing cost that never shows up in the royalty line.
10. The personal guarantee and post-term covenantsWhat do you sign personally, and what can you not do after you leave? Non-competes and post-term obligations outlast the agreement.

Take this further

• See the actual documents, company by companyFDDfacts — dated, sourced reviews of the major clinic franchises.
• Total the ten-year ongoing take at your numbersRoyaltyMath — the ongoing-fee calculator.