Buying a franchise: how to cross-check references from the network

Before buying a franchise, speaking to people already operating under the brand can help you understand how the agreement works in practice. But a visit arranged by the franchisor is not the same as an independent check. Experiences vary across a franchise network: your aim is not to collect recommendations, but to cross-check facts. This guide explains how to choose people to speak to, prepare useful conversations and turn their answers into documented decisions.

1. Ask for an overview of the network before choosing references

Do not start by calling only the outlets highlighted in the sales presentation. First, request a list of the network’s outlets in Spain that distinguishes franchisor-owned businesses from those run by franchisees. A company-owned shop may showcase the concept well, but its manager does not necessarily take on the same obligations that you would.

Spain has specific regulations governing franchising, although no single law covers every aspect of the franchise agreement in detail. Article 62 of Law 7/1996 on the Regulation of Retail Trade and Royal Decree 201/2010 set out pre-contractual disclosure obligations. General civil, commercial and competition law also apply.

The franchisor must provide the required information in writing at least 20 working days before any franchise agreement or preliminary agreement is signed, or before the prospective franchisee makes any payment to the franchisor.

This information includes the structure and extent of the network in Spain, identifying company-owned and franchised outlets, their locations and the number of franchisees who have left the network over the previous two years. It must also state whether those departures resulted from the expiry of the agreement or other reasons for its termination.

Use these details as a starting point, not as a guarantee of quality. Nor should you treat an old Franchisors Register number as an endorsement: the national requirement to notify that register was abolished in 2018.

2. Choose a range of experiences, not just showcase examples

You can accept references suggested by the franchisor, but supplement them with your own selection of publicly listed outlets. Look for a mix relevant to your plans:

• Recently opened businesses: their owners will remember any differences between the initial presentation and the actual start-up process.
• Established businesses: their owners know how the relationship has developed and what has changed over time.
• Comparable locations: these help you distinguish factors linked to the brand from those specific to a particular area.
• Former franchisees, where you can legitimately contact them: they offer a perspective that is missing from the current network.

No particular number of interviews guarantees the right decision. What matters is avoiding a group made up entirely of similar businesses or selected solely for sales purposes.

Make contact politely, explain that you are considering joining the network and arrange a convenient time to talk. You have no right to demand another business owner’s accounts, contract or confidential information. If they decline to speak, do not treat that refusal as evidence about the brand.

3. Ask questions that help you verify facts

Use a consistent set of questions so you can compare answers without leading people towards a particular response. Replace ‘Are you happy?’ with open questions that invite concrete examples:

• What aspect of day-to-day operations differed from your understanding before you signed?
• What information do you wish you had asked for while assessing the opportunity?
• Can you describe a significant change announced by the franchisor and how it was implemented?
• How are franchisees’ suggestions or complaints collected?
• What would you check if you were considering joining the network today?

When someone makes a significant claim, ask when it happened, which outlet it affected and whether it is still happening. An old incident resolved through a new procedure is not the same as a recurring problem that continues today.

Also distinguish between direct experience and comments from third parties. ‘This happened to me’ carries different weight from ‘People say this happens’. Take notes with permission, and do not record or share conversations without considering the relevant legal and privacy obligations.

4. Cross-check discrepancies before committing

Organise the answers in a simple table: issue, franchisor’s account, experience reported, date and checks still needed. Separate verifiable facts from personal opinions.

If several people describe the same discrepancy, raise it neutrally with the franchisor without unnecessarily identifying those who spoke to you. Ask for a written explanation and, where appropriate, supporting documents. Do not assume that a breach has been proven simply because a comment is repeated.

Departures from the network require particular care: an agreement expiring, an owner retiring and a disputed termination are not equivalent situations. Nor should you automatically attribute every closure to the franchise model. Check the reasons as far as possible and acknowledge anything that remains unclear.

Practical conclusion: before signing or paying, gather a range of perspectives, document significant contradictions and have them reviewed independently. References should help you ask better questions, not replace a review of the agreement or turn the decision into a popularity contest.