Complete and document all 12 checkpoints before assessing readiness. Incomplete evidence on even one item is worth pausing for.
1
Financial Analysis
I have modeled performance at lower-quartile assumptions, not median
Lower quartile is your realistic downside. If the math does not work there, you should not sign at any median projection.
Your documented answer
I know my working capital requirement beyond the Item 7 estimate
Item 7 covers the initial investment. It does not tell you how much cash you need to survive months 1 through 12. Call franchisees and ask what they actually needed.
Your documented answer
I have reviewed Item 19 or obtained financial performance data from franchisees directly
A blank Item 19 is not a reason to stop. It is a reason to get the data directly from existing franchisees. You need real financial performance data before you commit capital.
Your documented answer
2
FDD Document Review
I have reviewed Item 3 and understand the litigation pattern, not just the count
Count matters less than direction. Franchisors suing franchisees versus franchisees suing franchisors tells you something important about the relationship dynamic.
Your documented answer
I have read Item 12 clause by clause and know what my territory protection actually excludes
Summary language in Item 12 is almost always more protective than the actual clause text. Read the carve-outs: non-traditional locations, digital channels, adjacent brand rights.
Your documented answer
I have identified every ongoing fee and confirmed which are uncapped
Royalties, marketing fund contributions, technology fees, training fees, vendor markups. Any fee without a stated contractual maximum is a future financial variable you cannot model accurately.
Your documented answer
3
Independent Validation
I have spoken to at least 5 franchisees I contacted through the Item 20 list directly
Not through the franchisor. Not through the broker. You found them on the Item 20 list and called them yourself. Franchisor-arranged references are not independent validation.
Your documented answer
I have spoken to at least 2 former franchisees who left the system
Former franchisees have no financial stake in the conversation. They are often the most candid source of information about what the business is actually like and why people leave.
Your documented answer
A franchise attorney reviewed the agreement and was retained and paid by me
Not recommended by the broker or franchisor. Their job is to find problems, not facilitate the deal. What they flag is worth reading carefully.
Your documented answer
4
Decision Quality
I have run a territory analysis for my specific market
Demographics, competition, and market conditions in your specific area are variables the FDD cannot capture. They determine whether the system's historical performance translates to your market.
Your documented answer
I attempted to negotiate the items flagged in my FDD analysis
The 14-day window is a negotiation period, not just a review period. Every flagged item is a potential discussion point. Buyers who sign without negotiating anything left value on the table.
Your documented answer
The people most affected by this decision are informed and aligned
A spouse or partner who is not fully informed about the financial model and time requirements is a risk factor the FDD does not capture and that shows up after signing.
Your documented answer
checkpoints documented
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