Franchise Disclosure Document & Due-Diligence Checklist
5 critical steps still outstanding
This is a preparation guide, not legal advice. Always have a franchise lawyer and accountant review the documents before you sign.
Why use this tool?
Under the Franchising Code you receive a disclosure document at least 14 days before signing — but most buyers don't know what to check inside it. Skipping due diligence is the most expensive mistake in franchising. This checklist turns the process into a concrete list of steps, weights the critical ones, and gives you a readiness score so you know whether you're ready to sign or still have work to do.
Who uses the Disclosure Document Checklist?
- Prospective franchisees — working methodically through due diligence before committing.
- First-time buyers — who don't yet know what a proper review involves.
- Franchise lawyers & accountants — giving clients a structured pre-signing checklist.
- Partners buying together — making sure nothing is missed before signing jointly.
How to use it
Work through your readiness in three steps:
- Tick what you've completed. Check each due-diligence item you've genuinely finished. Be honest — the score is only useful if it's accurate.
- Read your readiness score. The tool shows how many steps you've completed and flags whether any critical items are still outstanding.
- Close the gaps before you sign. Complete the unchecked items — especially the critical legal, financial and franchisee-reference steps — before you commit.
Frequently asked questions
What is franchise due diligence?
Due diligence is the research you do before buying a franchise: reviewing the disclosure document and agreement, checking fees and territory, verifying the franchisor's track record, contacting current and former franchisees, and getting independent legal and financial advice. This checklist walks you through it.
What should I check in a franchise disclosure document?
Key items include all fees (initial, royalty, marketing and other), the total investment, territory and exclusivity, the term, renewal, transfer and termination conditions, the franchisor's litigation history, and the list of current and former franchisees to contact.
How long do I have to review a franchise agreement?
The Franchising Code requires the franchisor to give you the disclosure document and agreement at least 14 days before you sign or pay a non-refundable amount. You also get a 14-day cooling-off period after signing. Use that time for the steps in this checklist.
Do I need a lawyer to buy a franchise?
It's strongly recommended. A franchise-experienced lawyer can explain the agreement's obligations, restraints, renewal and exit terms — the clauses that matter most if things go wrong. Pair that with an accountant to review the numbers.
How many franchisees should I speak to?
Aim for at least 3–5 current franchisees and, importantly, some former ones — their experience is often the most revealing. Ask about real earnings, franchisor support, hidden costs and whether they'd buy again.