Franchise validation is the process of calling and meeting with existing franchisees before purchasing a franchise. It is one of the most important due diligence steps a prospective franchisee can take, and it is entirely separate from your attorney’s review of the legal documents. The FDD’s Item 20 gives you the list you need: every current franchisee and every franchisee who left the system in the past three years, with their names, addresses, and phone numbers. That list is your starting point. What you do with it is what separates informed buyers from people who sign without really knowing what they are getting into.

Validation calls cannot replace a thorough FDD review by a franchise attorney. They serve a different purpose. The FDD tells you what the franchisor says on paper. Validation calls tell you whether the reality on the ground matches those promises. Both are essential. Neither one alone is sufficient.

What Is Franchise Validation?

Franchise validation is the informal but structured process of directly contacting current and former franchisees in the system you are considering. You ask them about their experience: the training, the ongoing support, the actual unit economics, the relationship with corporate, and whether they would do it again.

The term “validation” comes from the idea that you are validating the franchisor’s claims. Franchisors make many promises during the sales process, in the FDD, and in marketing materials. Validation calls are how you test those promises against the experience of people who are actually living inside the system every day.

Franchise validation is not the same as talking to a franchisee who is referred to you by the franchisor. Franchisors often have a “Discovery Day” process that includes curated conversations with happy, high-performing franchisees. That is a sales tool. Independent validation means reaching out directly to franchisees from the Item 20 list, without the franchisor facilitating or filtering the conversation.

How to Get the List of Franchisees to Contact

Item 20 of the Franchise Disclosure Document is legally required by the FTC Franchise Rule (16 CFR Part 436) to include a complete list of all current franchisees with their names, addresses, and telephone numbers. It must also list all franchisees who left the system in the prior three fiscal years, their contact information, and the reason for departure (transferred, terminated, not renewed, or other).

You receive the Item 20 list when you receive the FDD from the franchisor. Under the FTC Rule, you must receive the FDD at least 14 calendar days before signing any agreement or paying any money. The Item 20 list is part of that document.

At Lopes Law LLC, when we conduct an FDD review, we analyze Item 20 specifically to identify: the total number of current franchisees versus the number who left in the past three years (the attrition rate), the geographic distribution of current franchisees, and any patterns in why franchisees left. A high attrition rate relative to system size is a significant warning sign that warrants further investigation during validation calls.

How Many Franchisees Should You Call?

At minimum, contact 5 to 10 current franchisees. More is better. Here is how to think about which franchisees to prioritize:

• New franchisees (under 2 years): They can speak to how accurate the onboarding training was and whether the initial support matched what was promised.
• Mid-term franchisees (3 to 5 years): They can speak to the day-to-day reality of operating in the system and how the franchisor-franchisee relationship evolves over time.
• Long-term franchisees: They can speak to renewal terms, territory changes over time, and whether the system has improved or deteriorated under the current leadership.
• Franchisees in your target market: A franchisee in a similar geographic or demographic market will give you the most relevant revenue and operational data for your situation.
• Former franchisees: This is the most valuable and most overlooked group. The FDD must list them. Call them. People who left the system will give you information that current franchisees who are still invested in the brand may not share.

Do not just call the franchisees who appear most enthusiastic or are most conveniently located. The goal is a representative sample, not a curated one.

15 Questions to Ask During Franchise Validation

The quality of a validation call depends on the questions you ask. Here are 15 specific questions that experienced franchise buyers and their attorneys recommend:

1. “Was the initial training program adequate to prepare you for day one operations?” This reveals whether the franchisor delivers on its training promises from the FDD.
2. “How responsive is corporate support when you have an operational problem?” Response time and quality of support are among the most common franchisee complaints.
3. “What does your typical week look like in terms of hours worked?” This reality-checks the lifestyle claims made during the sales process.
4. “When did you start generating positive cash flow?” Compare this to the Item 19 financial performance representations in the FDD, if any exist.
5. “Do you feel like your territory is adequately protected?” Territory encroachment is a common dispute in franchise systems.
6. “Have you ever felt that the franchisor acted against your interests?” Open-ended questions like this often reveal the most important information.
7. “Were the startup costs and ongoing expenses accurately represented in the FDD?” Item 7 of the FDD lists estimated initial investment. How close was reality?
8. “How do you feel about the required vendor and supplier relationships?” Some franchisors require franchisees to buy from approved suppliers at above-market prices, which affects profitability.
9. “What marketing support does corporate actually provide, and is it effective?” The gap between promised and delivered marketing support is significant in many systems.
10. “Would you buy this franchise again knowing what you know now?” This is the single most revealing question in any validation call.
11. “What is the most difficult part of operating in this system?” Encourages candid responses about genuine challenges.
12. “How does corporate handle situations where franchisees disagree with a system change?” This tells you how authoritarian or collaborative the franchise relationship actually is.
13. “Do you feel the royalty and fee structure is fair given the support you receive?” Ongoing fees are the lifeblood of the franchisor but the ongoing burden for franchisees.
14. “Are there any franchisee associations or groups, and if so, what do they do?” Strong franchisee associations often indicate a healthier system with franchisees who feel empowered.
15. “Is there anything you wish you had known before signing that you would want me to know?” Always end with an open invitation for anything they want to share.

Take detailed notes during every call. At Lopes Law LLC, we recommend clients bring their notes from validation calls back to their attorney review session so we can cross-reference what franchisees said against what the FDD actually represents.

What Red Flags Should You Watch For During Validation?

Some red flags are obvious. Others are subtle. Here is what experienced franchise attorneys look for when clients report back on their validation calls:

• Reluctance to talk at all: If a franchisee is unwilling to speak with you or gives only one-word answers, that is itself a signal. Franchisees who are happy with their system are almost universally willing to talk to prospective buyers.
• Scripted or coached responses: If multiple franchisees use nearly identical language to describe their experience, they may have been coached by the franchisor on what to say. This is more common than most buyers expect.
• High turnover in Item 20: A system where 20% or more of franchisees left in a three-year period warrants serious scrutiny. Always compare the number of departures to the total system size.
• Former franchisees who were terminated (not transferred): Terminations suggest the franchisor used its agreement rights aggressively. Talk to those former franchisees directly.
• Evasive answers about revenues: Franchisees who deflect questions about actual revenues but were enthusiastic about everything else may be operating at a loss and unwilling to admit it.
• Franchisees who mention ongoing legal disputes: If current franchisees mention that there is an active franchisee dispute or class action, that is critical information to bring back to your attorney.
• Support that was strong at launch and disappeared: This is the most common complaint in mature franchise systems. The franchisor invests heavily in supporting franchisees in year one and then moves on to selling new franchises.

How Does Franchise Validation Work Alongside an FDD Review?

Think of the FDD review and validation calls as two lenses pointed at the same target. The attorney review examines the legal documents: what the franchisor is legally obligated to provide, what the franchisee is legally obligated to do, and where the risks and negotiating opportunities exist. Validation calls examine the human reality: whether current franchisees experience the system the way the documents describe it.

The two processes are most powerful when they work together. Here is the optimal sequence:

• Receive the FDD and engage your attorney for review simultaneously with beginning to schedule validation calls
• Complete your first round of validation calls while your attorney review is in progress
• Bring the findings from your validation calls to your attorney review session: what franchisees said about support, revenues, and vendor obligations
• Your attorney can cross-reference those findings against the specific FDD provisions they relate to
• Use the combined picture to identify which provisions you want to attempt to negotiate before signing

At Lopes Law LLC, we encourage clients to treat the FDD review as an active process, not a passive one. The written report we deliver is the formal output, but the conversation around what you found during validation calls is often where the most valuable insight emerges. For more on what our review covers, read our detailed guide on what an FDD review includes. For foundational context on the document itself, see our guide to what is a Franchise Disclosure Document. And if you are still deciding whether to hire an attorney at all, read our post on whether you need a lawyer to buy a franchise.

Frequently Asked Questions About Franchise Validation

After Validation: What Comes Next?

Validation calls are a critical step in the process, but they are not the last step. After completing your calls, bring your notes to your attorney and discuss any concerns that emerged. Your attorney can assess whether those concerns are addressed (or contradicted) by specific provisions in the FDD and franchise agreement. In some cases, validation findings provide leverage for negotiating modifications to the agreement before you sign.

If validation calls raise serious concerns that cannot be resolved through negotiation or further investigation, the right decision may be to walk away from that particular franchise. No deposit or emotional investment in a franchise concept is worth entering a 10-year legally binding relationship with a franchisor whose existing franchisees are unhappy. The FTC Franchise Rule specifically provides a 14-day cooling-off period before you can sign precisely because informed decision-making takes time.

At Lopes Law LLC, we help prospective franchisees through every stage of this process, from initial FDD review to validation strategy to final agreement negotiation. Our goal is to make sure you enter any franchise relationship with clear eyes and complete information.

Reach out, we are friendly. Call now for a free consultation at (267) 777-9117 or schedule your free 20-minute consultation online.