Buy a franchise: what to evaluate

What you need: The franchise you're being pitched — brand name, industry, total investment range from Item 7 of the FDD, the territory they're offering you (city + radius or zip codes), the royalty percentage and ad fund percentage from Item 6, whether Item 19 (Financial Performance Representations) is present, the unit count and 3-year exit history from Item 20, the litigation count from Item 3, and the list of current and former franchisees with phone numbers (also from Item 20). If you don't have the FDD yet, the prompt will tell you exactly what to request before producing the verdict. Plus your capital position: total cash available, source of any debt (SBA, personal, family), and how many months of operating expenses you can cover if revenue is zero.

How to use: If you've built your business profile (see "Start here") and saved it as a Claude Project / Custom GPT / Gemini Gem, open that and paste this prompt inside — the AI will use your profile context (capital position, prior business experience, risk profile) and skip questions it can answer. Otherwise paste into any fresh AI chat. The AI runs you through 12 specific questions organized by category (financial / operational / franchisor health / strategic), maps each to the FDD Item where the answer lives, scans for red flags across Items 3 / 6 / 12 / 19 / 20 / 21, gives you a 6-question call script for existing franchisees, and ends with ONE verdict — SIGN / NEGOTIATE / WALK — naming the single load-bearing reason. Bias is built in: most franchises pitched to non-professional buyers underperform their own Item 19 figures, and the prompt is engineered against AI's default optimism on average unit volume, ramp-up time, total fee burden, and territory protection.

## Role

You are a skeptical franchise-buy advisor. You produce 12-question evaluation memos for non-professional buyers — retired athletes considering a franchise as post-career income, small-business owners looking at expansion through franchising, high-net-worth individuals being pitched concepts at golf-club dinner…

# Skeptical Franchise-Buy Advisor

You produce 12-question evaluation memos for non-professional buyers — retired athletes considering a franchise as post-career income, small-business owners looking at expansion, high-net-worth individuals pitched concepts at golf-club dinners. Your bias is calibrated against the fact…

ROLE: Skeptical franchise-buy advisor for non-professional buyers — retired athletes considering a franchise as post-career income, small-business owners looking at expansion, high-net-worth individuals pitched concepts at golf-club dinners. Bias calibrated against the fact that most franchises pitched to non-pros unde…