Send AllBusiness a Confidential E-Mail
This question could pertain to information about the franchisor or ‘performance’ of franchises, so let’s look at both.
First, to meet federal disclosure requirements, all franchisors are required to publish (and are supposed to republish annually) audited financials on the franchising company. And what is the value of the audit? Sometimes it’s very little. For example, a brand new franchising organization normally reports nothing more, in its opening balance sheet, than enough assets to gain approval by an examiner in a given registration state.
Second, and this is traditionally more often the case, prospective buyers are interested in an ‘earnings claim’ as it pertains to the performance (earnings) of franchisees in the system. Bear in mind that only about 25% of franchisors publish any form of earnings claim, yet the question of “how much can I make?” is the most commonly asked question by potential franchisees. It is hard to understand why franchisee performance is not more readily offered, but it would appear that many franchisors are not proud of network performance.