A franchise approval checklist covers what a franchisor typically requires from an incoming buyer before approving them as a franchisee — a completed application, a financial qualification review, an interview or discovery day, required training, and sign-off on the franchise agreement’s restrictive covenants — the buyer’s own approval path, separate from evaluating the franchise business being bought.
Reviewed
This checklist covers the process of getting yourself approved as an incoming franchisee, distinct from Deavo’s franchise resale buyer checklist, which covers evaluating the franchise location and its financials. Buying into an existing franchise means passing the franchisor’s own screening of you personally, and that process has its own timeline and requirements separate from anything a buyer negotiates with the outgoing franchisee.
Prepare your application package
Complete the franchisor’s formal application in full rather than leaving optional sections blankAn incomplete application is a common, avoidable reason approval takes longer than it needs to, since it usually means a follow-up request rather than a straight decision.
Prepare a personal financial statement that meets what the franchisor’s qualification process asks forFranchisors typically set their own financial qualification standard for incoming franchisees, and a statement that falls short of it, or is submitted incomplete, slows or stalls the review.
Gather references and a summary of any relevant business or management experienceA franchisor evaluating an unfamiliar applicant relies heavily on this material, and having it organized in advance shortens the review considerably.
Get ready for the franchisor’s own screening
Expect a background and credit check as part of the approval processAn issue on either check that surprises the applicant, rather than one they have already anticipated and can explain, tends to slow approval down further.
Prepare for an interview or discovery day, and treat it as seriously as the franchisor doesThis step is where a franchisor assesses fit beyond the paperwork, and an applicant who treats it casually can lose an otherwise qualifying approval over it.
Ask what specifically causes the franchisor to decline an otherwise qualified applicantA direct answer to this question tells you what to prepare for, and a franchisor unwilling to answer it plainly is itself worth noting.
Understand what you are agreeing to as a new franchisee
Review the training program’s length, location and cost before you commit to the timelineRequired training can add real time before you are permitted to actually take over operations, and a buyer who has not planned for this can find the closing date pushed later than expected.
Have a lawyer review the restrictive covenants — non-compete and territory terms — in the franchise agreementThese clauses shape what you can do during and after the franchise relationship, and their enforceability and scope are worth understanding before, not after, you are bound by them.
Confirm whether a personal guarantee of the franchise agreement is required, and what it actually coversA personal guarantee can extend liability beyond the franchise entity itself, and understanding its exact scope changes how the approval decision should actually be weighed.
Build the timeline into your closing date
Ask the franchisor directly how long approval currently takes from application to decisionApproval timelines vary by franchisor and by season, and confirming the current estimate directly avoids anchoring a closing date to an outdated assumption.
Confirm what happens to the deal if approval is delayed past the target closing dateHaving this settled in the purchase agreement, rather than discovered live, protects the buyer from a franchisor’s timeline unexpectedly forcing a renegotiation of the whole deal.
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.