• Know exactly what the start-up and reoccurring monthly fees are. Ask for them in writing.

• Are there additional fees for belonging to a regional business group or 20-group?
Is participation mandatory?

• Are royalty payments assessed? What’s the percentage?

• Are there additional fees for participating in corporate (the franchisor) sponsored marketing
programs, or are all marketing programs/initiatives included within your
monthly fees?

• If the franchisor has an insurance and/or marketing department – are there any reoccurring fees to support the
initiatives of these departments?

• If corporate insurance programs are available – are you guaranteed placement on any insurance
programs?

• What if you elect not to participate in available corporate insurance programs, are you still a good fit for the
franchise?

• If facility image branding (re-modeling) is mandated, make sure you know the time frame for compliance and the
average cost of re-branding for a similar size facility.

• Are there any mandated fee-based training requirements your business must
adhere to? What is the compliance time frame; and approximate cost of
compliance - based on your business headcount?

• Are there any mandatory/proprietary software obligations? Additional fees? Potential hardware/software conflicts?

• If part and/or vendor rebate programs exist, what percent of rebates go back to the company and what percentage goes to you? Are
rebates paid monthly or quarterly? How are they processed?

• Will your participation (or lack of) in a corporate vendor program
(i.e., paint, part, etc…) effect the rebate percent of other franchisees
or the franchisor?

• Is there a “suggested” or minimum staffing headcount criteria to qualify as a candidate?

• If any “highly suggested” tools or equipment (such as computer measuring, tool
carts, or laser printer) are mentioned, what is the expected cost for
this equipment?

• Is participation in an annual corporate conference mandatory? Is any percentage of these fees built into the
monthly fee structure? If fees are included, are you reimbursed if you
elect not to attend conference, or do you forfeit the money?

• Do you plan on being in the business every day? Some franchisors mandate
owner/operators must be on premises every business day.

• Are there minimum net worth requirements for candidate consideration?

• Who promotes your new franchise? If the answer is you do, what are
the anticipated costs?

• Is there field support (regional/district service manager) for your business? What is the
minimum visit requirement? Will the support staff you are assigned have
the credentials and experience to consult on the unique challenges of
your business? (i.e. If your business focus is on production, are you
assigned a field support member whose strength is administration?) Ask
to review the Bio. of your field support staff.

• Lastly, ask how many businesses were added to the franchise system and how many
businesses left the system in the past 48 months. Request a current list
of all businesses that have left or have been removed within the past
48 months and do your due-diligence by calling on some. A list of
non-current franchisees is typically provided within the
highly-regulated franchise disclosure document package (FDD – sometimes
called a UFOC) – make sure your list is current to the month.

Like any business venture, know exactly what you’re getting into before leaping in. Before meeting with the franchise delegate, do your due-diligence and be prepared by writing down the important questions you have. Take the time to review each-one with the franchise representative, your attorney, and your financial adviser. Good luck.