Buying a Franchise: How the Process Works, Step by Step

The steps of buying a franchise at a glance

Most franchise purchases follow the same eight steps, and federal rules fix the order of the last few.

Source: FTC, A Consumer’s Guide to Buying a Franchise; FTC Franchise Rule, 16 CFR 436.2 and 436.5; SBA, Buy an Existing Business or Franchise.

Steps 1 and 2: set your budget, then research categories and brands

Start with your own numbers, not a brand. The FTC’s consumer guide to buying a franchise opens with two blunt questions: how much money do you have to invest, and how much can you afford to lose? Add the hours you can give and whether you want to work in the business or manage it.

Keep three figures apart: the initial franchise fee, the full opening cost in FDD Item 7, and the liquid capital a franchisor wants to see, which is a qualification minimum, not a cost. Our franchise costs and funding section and our guide to franchises under $100k show how those numbers interact.

Then choose a category before a brand, since home services, senior care and food ask for very different skills and hours. The FTC suggests checking local demand and competition. Browse franchise ideas by category, then build a short list.

Before shortlisting brands, it helps to know which kind of franchise you are buying, shown with 17 named systems in our franchise examples guide.

Before shortlisting brands, check which common claims hold up in our franchise advantages and disadvantages scorecard.

Step 3: get the FDD and read the Items that matter

The Franchise Disclosure Document is the core of your research. Under the FTC Franchise Rule, 16 CFR 436.2, the franchisor must give you its current FDD at least 14 calendar days before you sign a binding agreement or pay any money. The document has 23 Items set by 16 CFR 436.5. Read these first:

• Items 5 and 6: the initial fee and every ongoing fee, such as royalties and marketing funds.
• Item 7: the estimated initial investment. Plan around the high end.
• Item 11: training and franchisor assistance.
• Item 12: what territory protection you get.
• Item 19: financial performance representations, if any. Under 16 CFR 436.9 no franchise seller may give you figures that are not in Item 19.
• Item 20: outlet openings and closures, plus contacts for current and former owners.
• Item 21: the franchisor’s audited financial statements.

Before reading an FDD, confirm the deal meets the three-part legal franchise definition in 16 CFR 436.1(h).

Each of the 23 Items, with its rule section and what 259 recent filings show, is laid out in our guide to the franchise disclosure document.

Item 9 lists what you must do and Item 11 what the franchisor must do; our franchisee vs franchisor duties table maps both, Item by Item.

If a seller cannot produce an FDD, ask which FTC exemption applies; our Waffle House franchise page walks through that check for a brand with no public offer.

If a seller cannot hand you an FDD at all, as with anyone pitching an In-N-Out franchise that the company says does not exist, stop before paying anything.

If a brand has no FDD on file, as with CAVA, the offer cannot be checked against Items 5 to 20; our CAVA franchise check shows how to confirm that in EDGAR and CARDS.

Some well-known chains have no FDD on file because they stopped selling new franchises, as the Texas Roadhouse franchise case shows.

Step 4: validation calls with current and former owners

Owner calls are where you test everything the franchisor told you. The FTC says talking to current and former franchisees may be the most reliable way to verify the franchisor’s claims.

Use the Item 20 lists and pick names yourself, including owners who left the system. Ask what they actually spent compared with Item 7, whether they opened on time, and what problems, if any, they have with the franchisor.

Steps 5 and 6: financing and professional review

Line up money and advisers before you fall for a brand. The SBA says the maximum 7(a) loan is $5 million, and its Franchise Directory lists the brands eligible for SBA financial assistance, though a listing is not an endorsement. Item 10 shows any franchisor financing.

Then pay for independent review. The FTC says an accountant can help you understand the franchisor’s financial statements and develop a business plan, and a lawyer experienced in franchise matters can help you understand your obligations under the franchise contract. The SBA agrees.

The 12 clauses a lawyer should check, with how often each appears in 259 recent FDDs, are listed in our franchise attorney checklist.

Veterans and military spouses can check which SBA and VA programs apply before financing in our guide to franchise opportunities for veterans.

Steps 7 and 8: discovery day and signing

Discovery day comes late, once you are down to one or a few brands. FranChoice describes it as an in-person event hosted by the franchisor at its headquarters to meet its team. Treat it as a two-way interview.

Signing has two federal guardrails. The 14-day FDD window must have passed, and under 16 CFR 436.2(b) a franchisor that unilaterally and materially changes the standard agreement must give you the revised agreement at least seven calendar days before you sign, unless the change came from negotiations you started.

Buyers in California face extra state rules before signing, from DFPI registration to a 14-day clock that includes every proposed agreement, as set out in our California franchise buyer’s checklist.

Buyers signing for a Florida location can check the franchisor’s FDACS exemption record and the state’s noncompete presumptions in our guide to franchise opportunities in Florida.

Before signing, read the contract itself, not only the FDD summary; our franchise agreement walk-through quotes ten clauses from three filed agreements.

Signing starts a reporting schedule: weekly sales reports, monthly statements and a renewal notice window, laid out in our calendar of what owning a franchise requires after opening.

How long buying a franchise takes

Expect months, not weeks, though the floor is set by law. FranNet, a franchise consulting network, says the initial inquiry and research stage can take two to five months before a decision, that start to finish takes 3 to 6 months at the fastest and more than a year at the slow end, and that most franchisees open within 3 to 12 months after signing. FranChoice says the path from first conversation to a signed agreement may take anywhere from a few weeks to several months. The legal minimum is the 14-day FDD window.

Where a franchise consultant fits, and where it does not

A consultant helps most in steps 1 to 4 and cannot do steps 6 or 8 for you. According to the FTC, a broker typically reviews the amount of money you have to invest, directs you to opportunities that match your interests and resources, and may help with applications and paperwork. Our hub on what a franchise consultant does covers the full process.

• Where it fits: building a shortlist, scheduling franchisor calls and organizing owner calls.
• Where it does not: legal and accounting review, and brands outside the consultant’s network.

The FTC notes brokers often work for franchisors and are paid only if a sale is made, so read how franchise consultants get paid and whether they are worth it before your first call, and compare networks in our guide to the best franchise consultants. If you want a shortlist built around your budget, our free franchise match quiz introduces you to a consultant. We may be paid for that introduction, as our disclosures explain.

Franchise basics, explained from the primary documents

Plain-language guides to the terms, documents and roles a buyer meets first, each checked against the FTC Franchise Rule and the filings it describes.

• 7-Eleven Franchise Cost: 7-Eleven's own pages put the traditional franchise fee at $50,000 to $750,000 and the conversion fee at $25,000, with a gross profit split instead of a sales royalty.
• Ace Hardware Franchise: Ace Hardware sells a cooperative membership with $5,000 of stock and no royalty; its 2026 FDD puts a new store at $611,928 to $2,018,550.
• ATM Franchise: ACFN's 2026 FDD lists $37,561 to $58,211 for one to 3 ATMs; this page reads it item by item and adds the ADA, Regulation E and FTC rules for ATM offers.
• Automotive Franchise Opportunities: Thirteen automotive service franchise systems compared from their current FDDs: Item 5 fees, Item 6 royalty bases, Item 7 ranges, territories and outlet counts.
• Baskin Robbins Franchise: The 2026 Baskin-Robbins FDD prices five formats differently, from a $25,000 standalone fee to $6,250 for a 10-year SDO term.
• Bojangles Franchise: The April 2026 Bojangles FDD puts a traditional restaurant at $2,851,880 to $3,951,200, and the company map lists 30 states as available for development.
• Bubble Tea Franchise Supply Rules in 4 FDDs: Item 8 of the Gong cha, Kung Fu Tea, Sharetea and Tapioca Express FDDs shows who must supply your tea and tapioca, the restricted share of purchases and the Item 7 dollars paid to the franchisor.
• Burn Boot Camp Franchise Cost: Kline Franchising's summary of its April 20, 2026 FDD puts a Burn Boot Camp gym at $291,145 to $678,003, with fixed fees of $3,860 a month from day 90 after opening.
• Capriotti's Franchise Disclosure Document (FDD), Item by Item: A page-by-page map of the July 29, 2026 Capriotti's FDD, with Item 7 costs, Item 6 fees, Item 20 outlet counts and where to download the filing.
• Car Wash Franchise Costs by Format in 2026 FDDs, and the Water and Zoning Permits Each Needs: The one car wash tunnel FDD on file in Minnesota lists $3,482,389 to $11,846,697 before land; water, sewer and zoning rules decide whether a site can open.
• CAVA Franchise: CAVA Group sells no franchises: its SEC filings report 476 company-run restaurants at July 12, 2026 and 153 former Zoes Kitchen sites converted by October 2023.
• CertaPro Painters Franchise: The 2026 CertaPro FDD prices a subcontractor model at $171,000 to $246,000 and an employee model at $203,250 to $320,500, with a minimum royalty and territory sales floors from year 2.
• Chicken Salad Chick Franchise: The 2026 Chicken Salad Chick FDD puts a first restaurant at $777,000 to $1,033,500 and shows franchised units rising to 252 by the end of 2025.
• Chipotle Franchise Myths, Checked Against Its SEC Filings: Chipotle's 2025 10-K counts 3,938 U.S. restaurants, all company-owned, and 14 international partner-operated units; it last had U.S. franchisees in April 2007.
• Club Pilates Franchise Cost: The amended 2026 Club Pilates FDD puts one 12-reformer studio at $413,289 to $1,029,811, with $197,901 to $241,189 paid to the franchisor.
• Coffee Franchise Costs by Format: Five 2026 coffee FDDs price nine store formats from $142,000 to $2,283,500 and set who must supply the beans.
• Commercial Cleaning Franchise: A commercial cleaning franchise usually sells promised monthly billing; six 2026 FDDs show what each billing dollar costs, what happens when accounts are not delivered and who owns the contracts.
• Dave's Hot Chicken Franchise: The May 4, 2026 Dave's Hot Chicken FDD sells area development rights for at least three restaurants, with an $80,000 Development Fee and $616,800 to $4,121,900 per restaurant.
• Daycare Franchise Licensing First: State staff-to-child ratios, square feet per child and director credentials in Texas, Georgia and Florida, read against Items 7 and 15 of four child care FDDs.
• Dog Grooming Franchise Opportunities by Format: Six 2026 FDDs compared line by line: a grooming van, a storefront salon and a daycare that grooms, with vehicle, build-out and licensing costs.
• Dutch Bros Franchise: Dutch Bros has sold no new franchises since 2017; its filings show 337 of 1,225 shops franchised at June 30, 2026, down from 264 of 471 at the 2021 IPO.
• Fast Food Franchise Costs, Fees and Formats in 22 FDDs: Item 5, Item 6 and Item 7 figures from 22 current fast food franchise disclosure documents, with 58 build formats sorted by lowest published cost.
• Firehouse Subs Franchise: The March 2026 Firehouse Subs FDD prints three Item 7 totals from $405,350 to $1,577,750, with $26,200 paid to the franchisor.
• Franchise Advantages and Disadvantages, Tested Against the Data: Thirteen common franchise pros and cons checked against Census survival studies, SBA loan outcomes and 259 franchise disclosure documents.
• Franchise Agreement: Ten clauses quoted from the franchise agreements in three Minnesota-filed FDDs, each mapped to the Item 17 row that summarises it.
• Franchise Attorney: A franchise attorney should review 12 clauses, each tied to its FDD Item and measured in 259 FDDs, inside the FTC's 14-day waiting period; here is how to verify the lawyer's license.
• Franchise Definition: The federal franchise definition in 16 CFR 436.1(h) has three elements and a $735 payment floor; eight state statutes word it differently.
• Franchise Disclosure Document (FDD): A franchise disclosure document has 23 Items set by 16 CFR 436.5 and must reach buyers 14 calendar days before signing; we pair each Item with data from 259 FDDs.
• Franchise Examples by Type: Seventeen real franchise examples sorted by type, from business format to product distribution, conversion and host site, each with its FDD unit count or governing statute.
• Franchise Fee: The median initial franchise fee in 259 FDDs issued 2025 to 2026 was $49,500, and 51 of 66 Item 5 sections read in full ruled out any refund.
• Franchise Financing: SBA 7(a) rate caps at 7.00% prime, FY2027 upfront fees, 504 contributions, ROBS rules and the loan terms in three 2026 FDD Item 10 sections.
• Franchise for Sale: A nine-step checklist for buying a franchise for sale, built from the transfer clauses, fees and Item 20 counts in four 2025 to 2026 FDDs.
• Franchise Opportunities for Veterans: Eight federal programs, VetFran and four 2026 FDD veteran clauses, each checked at the source, with who qualifies and what each one does not pay for.
• Franchise Opportunities in California: California lets a franchise be sold only if DFPI registered the offer or it is exempt, and the FDD plus all agreements must arrive 14 days before you sign.
• Franchise Opportunities in Florida: Florida does not review franchise disclosure documents; franchisors file a $100 annual FDACS exemption notice, and 821 were registered on October 27, 2026.
• Franchisee vs Franchisor: The franchisor grants the franchise and the franchisee runs and pays for it; 16 duties and rights compared side by side with the FDD Item behind each and shares from 259 FDDs.
• FTC Franchise Rule: How the FTC Franchise Rule decides coverage, the $735, $1,469,600 and $7,348,000 exemption lines, and the four Franchise Rule cases filed since 2008.
• Gas Station Franchise: A gas station franchise can pair a PMPA fuel supply agreement with an FTC-regulated store franchise; Circle K and APLUS filings show what each side costs.
• Goddard School Franchise: The April 2026 Goddard FDD prints three cost totals, from $1,003,500 for a developer-built lease to $8,908,000 for buying land and building.
• Gym Franchise Costs by Format: Seven gym franchise FDDs compared by format: Item 7 totals from $259,840 to $5,386,000, floor space assumed, Item 6 fee shapes and presale rules.
• Handyman Connection Franchise: The March 2026 Handyman Connection FDD puts the opening cost at $115,837 to $238,736, with craftsmen doing the work and a non-exclusive lead territory.
• Handyman Business Franchise: A handyman business franchise costs $73,050 to $238,736 to open in 2026 FDDs; this compares Ace Handyman Services, Mr. Handyman, Handyman Connection and TruBlue item by item.
• Home-Based Franchise: 48 of 259 Minnesota-filed FDDs say the business or its office may run from a home or residence; this index quotes each one with its Item 7 and Item 15 terms.
• Home Inspection Franchise: Four home inspection FDDs put the opening cost at $41,200 to $134,290, and two of them list 33 states in common that license inspectors.
• Home Services Franchise Trades Compared: Eight home service trades mapped by state license rules in California, Florida and Texas, FDD vehicle requirements and Item 7 totals from $73,878 to $385,570.
• Hotel Franchise Fees, Land and PIP Rules Across 20 Brand FDDs: Twenty hotel FDDs filed in 2025 and 2026 charge per-room initial fees, 6.5% to 9.5% of room revenue in royalty and brand fund, and leave land out of Item 7 in 18 cases.
• How to Buy a Franchise With No Money: SBA start-up loans need a 10% injection and only 24 of 259 franchisors finance part of the fee, so a no-money buyer has to fund the 10% with a gift, partner, ROBS or seller note.
• How to Franchise a Business: How to franchise a business in eight steps, with the 16 CFR 436 section, state statute and dated fee behind each, from the $350 USPTO filing to California's $1,865 registration.
• HVAC Franchise: Three 2026 HVAC franchise disclosure documents put Item 7 at $113,808.50 to $288,900 and leave every license to the franchisee.
• Ice Cream Franchise Guide: Four current ice cream and frozen yogurt FDDs compared on production model, Item 7 equipment costs, Item 8 dairy supply contracts, winter operating rules and federal and state mix regulations.
• IHOP Franchise: The 2026 IHOP FDD prices a new restaurant at $1,907,682 to $4,823,457 before land, with a $50,000 fee, a 4.5% royalty and 99.3% of IHOPs franchised.
• In-N-Out Franchise: In-N-Out's own releases from January 2023 to June 2026 say none of its restaurants are franchised; eight burger chains that do franchise list 2026 Item 7 costs.
• Jamba Juice Franchise: The March 27, 2026 Jamba FDD prints four Item 7 tables, from $249,025 for a non-traditional site to $1,811,400 for an Auntie Anne's co-branded store.
• Jani-King Franchise: The 2026 Jani-King of Minnesota FDD prices four plans at $40,250 to $92,750 and puts the total startup cost at $49,754 to $137,887.
• Jollibee Franchise: JBM LLC's 2026 FDD puts a U.S. Jollibee at $1,614,568 to $4,589,057, while Jollibee's Philippine page lists P35M to P55M for a narrower set of costs.
• Junk Removal Franchise Costs, Trucks and Territories in Five FDDs: Five junk removal franchise FDDs list Item 7 totals from $96,010 to $359,160, with one or two trucks priced at $77,750 to $110,000 each.
• Kona Ice Franchise: The April 2026 Kona Ice FDD prices the franchise at $114,730 to $228,601, driven by a $87,365 to $157,491 truck, a flat-dollar royalty and four Item 10 lenders.
• Laundromat Franchise: Four laundry FDDs filed in 2026 print Item 7 totals of $217,000 to $1,983,000, and the three laundromat-only filings exclude tap, impact and meter fees.
• Owning a Lawn Care Franchise: The path to a lawn care franchise from pesticide applicator license to first spring treatment, with Item 7 and Item 6 from four lawn care FDDs.
• Matco Tools Franchise: A Matco Tools franchise is a mobile tool route costing $104,374 to $376,241 under the 2026 FDD, with no royalty and customer credit carried by the distributor.
• Mathnasium Franchise: Mathnasium's April 30, 2026 FDD puts a first center at $127,316 to $165,846, charges 10% of Gross Receipts plus a $650 base royalty, and ties the territory to 75 students after month 16.
• MOD Pizza Franchise: MOD Pizza franchises exist but 465 of 552 U.S. units were company-owned at the end of 2023, and Elite Pizza Holdings bought the chain on July 10, 2024.
• Nothing Bundt Cakes Franchise: The April 30, 2026 Nothing Bundt Cakes FDD prices the prototype bakery at $475,200 to $994,100 and routes 85% to 91% of opening purchases through required sources.
• Orangetheory Franchise: The September 2026 Orangetheory FDD puts one studio at $764,577 to $1,104,920 and prices 3-studio development rights at $150,000.
• Owning a Franchise: Owning a franchise, mapped as a calendar: the report days, fee dates, audit triggers and renewal windows printed in three 2026 FDDs.
• Panda Express Franchise: Panda Express licenses restaurants mostly in airports, bases and campuses: a $25,000 fee, an 8% royalty and $514,500 to $3,275,500 to open, per its 2026 FDD.
• Papa Murphy's Franchise: The 2026 Papa Murphy's FDD puts a take-and-bake store at $450,330 to $693,450, with no ovens, a 5% royalty and franchised outlets down to 965.
• Paris Baguette Franchise: The Paris Baguette FDD issued March 30, 2026 prices a cafe at $727,515 to $1,860,550 and makes the franchisor or an affiliate the only approved source of its dough.
• Pickleball Franchise Costs Compared: Four indoor pickleball franchise disclosure documents compared on Item 7 cost, fees, square feet per court and open versus signed clubs.
• Pizza Franchise Costs Compared: Eight pizza brands' current FDDs compared on fees, Item 7 ranges, required dough suppliers, delivery insurance and per-order digital charges.
• Property Management Franchise: Texas, Florida and California license and trust account rules for rental managers, read against four property management FDDs' fees, royalty floors and territories.
• Raising Cane's Franchise: Raising Cane's says it is not offering franchises anywhere; a November 2026 Minnesota registry search found no Raising Cane's FDD.
• Real Estate Franchise: Four brokerage FDDs issued in 2026 meter commission four ways, from a 6% royalty capped at $3,000 per agent to $135 per closing with no royalty.
• Restaurant Franchise Closures: Item 20 of 14 restaurant FDDs records 510 franchised outlets that ceased operations in fiscal 2025, set against the 2026 closure news.
• Restoration Franchise Requirements: Five 2026 restoration FDDs compared on IICRC certificate deadlines, Texas, Florida and New York mold licensing, TPA and national account clauses, and Items 5, 6 and 7.
• Self Storage Franchise: Storage Authority's 2025 FDD prints $298,000 to $9,800,000 and zero franchised outlets at the end of 2024, while the big REITs manage 3,080 stores for other owners.
• Senior Care Franchise Opportunity: Nine state home care license rules and six home care franchise disclosure documents compared on Items 5, 6, 7, 12 and 15.
• Shake Shack Franchise: Shake Shack sells no U.S. franchises; its SEC filings show 311 licensed Shacks run by partner companies at September 30, 2026, and the fee types those partners pay.
• Snap-on Franchise: The 2026 Snap-on FDD puts the total investment at $223,439 to $509,283, most of it financed by Snap-on Credit, with customer credit risk split across three channels.
• Spa Franchise Options Split by License: Massage, wax and med spa franchises compared through four 2025 to 2026 FDDs and the California, Texas and Florida rules on who may perform each service.
• Starbucks Franchise: Starbucks sells no U.S. franchises; its fiscal 2025 10-K counts 6,813 U.S. licensed stores run by host businesses beside 10,047 company-operated ones.
• Steak n Shake Franchise: Steak n Shake sells a $10,000 franchise partner contract on company restaurants and a traditional franchise with a $25,000 fee and a $155,970 to $2,340,385 build.
• Swim School Franchise: Three swim school FDDs read format by format, from rented lesson time at $57,500 to a built school at $3,746,733, with Florida and Texas pool permit rules.
• Texas Roadhouse Franchise: Texas Roadhouse ran 714 of its 816 restaurants itself at the end of 2025 and has not accepted new domestic franchisees since its fiscal 2015 10-K.
• Tim Hortons Franchise: The 2026 Tim Hortons FDD lists five US investment tables from $60,150 to $3,312,500, rent of 7% to 13% of Gross Sales, and a separate Canadian system run by The TDL Group.
• Topgolf Franchise: Topgolf sells no US or UK franchises; 7 of its 107 venues were franchised abroad at the end of 2024, and Leonard Green funds have owned 60% since January 2026.
• Travel Agency Franchise: Three travel franchise FDDs print Item 7 totals of $1,795 to $21,000, and four state seller of travel laws decide whose registration covers a home-based agent.
• Tropical Smoothie Cafe Franchise: The June 2026 Tropical Smoothie Cafe FDD puts the opening cost at $275,500 to $770,500, and its food menu shows up in ovens, training hours and supplier rebates.
• Urgent Care Franchise: Who may own an urgent care franchise in California, Florida, New York and Texas, what CLIA costs, and Items 5 to 7 of two urgent care FDDs.
• Vending Machine Franchise or Business Opportunity? The FTC Test, Cases and a Real FDD: Most vending machine offers are business opportunities under 16 CFR Part 437; Canteen's FDD lists $9,150 to $44,300 only for existing vending operators.
• Waffle House Franchise: Waffle House sells no franchises publicly, but archived company pages, SBA loan files and EEOC records show franchised operators from 1997 to 2024.
• Whataburger Franchise: Whataburger franchises only in select markets, its inquiry form starts at 5 restaurants in 5 years, and no Whataburger FDD was on Minnesota's registry in November 2026.
• Zaxby's Franchise: Zaxby's April 25, 2025 disclosure document puts one restaurant at $1,445,000 to $3,810,500, with a $35,000 fee, 6% royalty and two fee-refund incentive programs.

If the unit you want is already open, work through our resale checklist for buying a franchise for sale, which quotes the transfer clauses in four FDDs.

Whether a deal needs a disclosure document at all depends on the coverage test and the 2024 dollar exemptions in the FTC Franchise Rule.

Trades that need a state contractor license work differently, as the HVAC franchise licensing layers show for Arizona, Minnesota, North Carolina and Virginia.

Before signing, compare a brand’s Item 20 exits with any later filings, as in our review of restaurant franchise closures by brand.