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When it comes to buying a franchise, many aspiring business owners rush through the due diligence process — and that’s a costly mistake. In this post, we’ll dive into one of the most overlooked parts of franchise due diligence that can make or break your success: validation.
Franchise validation is your opportunity to speak directly with existing franchisees to understand what it’s really like to run the business — the challenges, the wins, and everything in between. Yet, most people don’t do it thoroughly enough or talk to the right people.
Here’s how to avoid that mistake and validate your franchise opportunities the smart way.
What Is Franchise Validation and Why It Matters
Validation is a step in your franchise due diligence process where you contact current franchise owners and ask about their experiences. You’ll want to understand:
- How profitable is the business after operating costs?
- How much support does the franchisor actually provide?
- What challenges do owners face day-to-day?
- What would they do differently if they started over?
While financial performance disclosures (Item 19 in the Franchise Disclosure Document) can give you numbers, real-world feedback gives you context — and that’s where validation becomes priceless.
The #1 Mistake in Franchise Due Diligence
The biggest mistake Beau Eckstein sees in franchise buyers?
Not validating with enough owners — and not validating with the right ones.
Many people only talk to a few franchisees or choose random ones from the list. But Beau recommends going a step further: talk to franchise owners with a background similar to yours.
For example:
If you’re a medical sales professional considering a home services franchise, ask your franchise development representative if they can connect you with other owners who also came from medical sales.
Why? Because they’ll have walked in your shoes. They’ll understand your mindset, your transition challenges, and how they adjusted from a corporate role to business ownership. These conversations often provide the most actionable insights that help you make a confident decision.
What to Look for During Validation Calls
Not all validation calls are equal. The goal isn’t to only hear “good stories” — it’s to uncover the truth about the business model.
Here’s how to structure your validation conversations:
- Talk to franchisees at different stages.
Speak to owners who are one year in, three years in, and five years in (if available). You’ll get a fuller picture of what growth looks like over time. - Ask about profitability and workload.
What do their margins look like? How many hours do they work each week? - Understand what separates top performers from the rest.
In Item 19, you’ll often see top 25% performers — find out what they’re doing differently. Are they multi-unit owners? Do they spend more on marketing? - Dig into support and communication.
How responsive is the franchisor? Do they deliver on their promises?
Validation is your window into the future. If the majority of franchisees sound frustrated or burnt out, take note — those are red flags.
Don’t Skip This: Make Sure Your Franchise Is SBA Approved
If you plan to finance your franchise with an SBA loan, there’s one more key detail:
As of June 1, 2025, only franchises listed on the official SBA Directory will qualify for SBA financing.
Before you fall in love with a brand, double-check that it’s on the SBA-approved franchise list. This small step can save you major headaches when it’s time to fund your deal.
Your Path to Finding and Funding the Right Franchise
Beau Eckstein and his team specialize in helping aspiring entrepreneurs find and fund their ideal business through franchise consulting and SBA financing. Whether you’re comparing franchise models or ready to structure your financing plan, their team provides end-to-end guidance.
👉 Visit bookwithbeau.com to schedule your free discovery call today.
And if you’re looking to scale your operations, don’t miss Beau’s free ebook, The Biz Scaling Playbook — a practical guide to building a high-performing business using virtual assistants and AI tools.
Final Thoughts
Franchise due diligence isn’t just about reviewing documents — it’s about connecting with people who’ve already lived the experience.
The validation process gives you real insight into what it takes to succeed and helps you align your expectations with reality.
So, before you sign that franchise agreement, validate thoroughly, talk to owners like you, and build a plan backed by data — not just enthusiasm.