You have found a franchise that looks good. The sales pitch was convincing. The numbers sound right. You are ready to sign and pay.
Stop. Before you transfer a single rupee, go through this checklist. It takes 2-3 days of verification. It can save you from a Rs 5-10 lakh mistake.
The Checklist
### Company Verification
1. Is the company registered? Check on mca.gov.in (Ministry of Corporate Affairs). Search the company name and verify its registration date, directors, and status. If the company was registered last month and claims 100 outlets, something is wrong.
2. How old is the brand? Brands under 2 years old carry higher risk. Not because new brands are bad, but because they have not been tested through economic slowdowns or operational scaling.
3. Check online reviews. Search "[brand name] franchise review" on Google and Quora. Read what existing franchisees say. Pay attention to complaints about support, product quality, and hidden charges.
4. Visit existing outlets. Go unannounced. Not the flagship outlet they show in the brochure. Visit 2-3 regular outlets and observe. Is the product quality consistent? Is the outlet well-maintained? Are the staff trained?
### Financial Verification
5. Get the FULL investment breakdown in writing. Not just the franchise fee. Total cost including equipment, setup, interiors, initial inventory, and recommended working capital.
6. Ask for a realistic P&L projection. Not the best-case scenario. Ask for average monthly revenue and expenses across their network. If they only share the best performer, they are hiding the average.
7. Understand the royalty structure completely. Percentage, frequency, base amount (some charge on gross revenue, others on net), and whether there are additional fees like marketing fund contributions.
8. Check for lock-in periods and exit penalties. Can you exit after 1 year? What do you forfeit? Can you sell the franchise to someone else?
### Franchisee Verification
9. Talk to at least 3 current franchisees. The brand should provide their contact details. If they refuse, that is a major red flag.
10. Ask franchisees the hard questions. What is your real monthly revenue? How long to break even? Would you invest again knowing what you know now? What is the brand's support like after signing?
11. Check if any franchisees have closed. Ask the brand directly: "How many outlets have closed in the last 2 years and why?" Evasive answers are a red flag.
### Agreement Verification
12. Read the entire franchise agreement. Every page. Not just the fee section. Pay special attention to clauses about territory exclusivity, renewal terms, performance minimums, and exit provisions.
13. Have a lawyer review it. Rs 5,000-10,000 for a legal review can save you from a one-sided agreement. Look for clauses that give the brand unreasonable power to terminate or change terms.
14. Check territory exclusivity. How is your territory defined? By pin code, radius, or city zone? Can the brand open another outlet 1 km from you?
### Operational Verification
15. Understand the supply chain. Where do ingredients come from? Are you forced to buy from approved suppliers? What are the lead times? What happens if there is a supply disruption?
16. Evaluate the training programme. How many days? Where? What is covered? Is there ongoing training or just a one-time session? Will they train your replacement staff if someone quits?
17. Check delivery platform performance. Search the brand on Swiggy and Zomato. What are the ratings? How many reviews? Low ratings on delivery platforms affect all outlets, including yours.
### Market Verification
18. Assess local demand. Is there demand for this product in your specific location? A waffle brand might thrive in Chandigarh but struggle in a small town where people have never had a waffle.
19. Check local competition. How many similar outlets exist within 3 km? Some competition validates demand. Oversaturation kills profitability.
20. Validate footfall. Physically stand at your proposed location during peak hours (5-9 PM for desserts/snacks). Count foot traffic. If it is under 150 people per hour, reconsider the location.
Red Flags That Should Stop You
Brand refuses to connect you with existing franchisees
Pressure to sign within days ("this territory is going fast")
No registered company or very recently registered
P&L projections that seem too good (30%+ net margins with minimal effort)
No clear exit clause in the agreement
Mandatory purchases from approved suppliers at significantly above-market rates
Green Flags to Look For
Brand proactively shares franchisee contact details
Transparent, itemised investment breakdown
Written franchise agreement reviewed and standard
Active, well-rated presence on Swiggy and Zomato
Clear territory exclusivity terms
On-site training and ongoing support commitment
TBWX passes all 20 checks on this list. We encourage every potential partner to do their own due diligence. [Start with a conversation](/franchise/apply) — we will connect you with existing franchise partners in your region.