EMPOWERCARE FIELD NOTES
Questions to Ask Before Buying a Healthcare Franchise
A due-diligence checklist covering disclosures, costs, territory, clinical responsibility, management support, assumptions, and risk.
Start with the disclosure documents
The Federal Trade Commission requires covered franchisors to provide a Franchise Disclosure Document with 23 categories of information. The FTC says a prospective franchisee generally must receive the FDD at least 14 days before signing a contract or paying money to the franchisor or an affiliate. Review it with independent legal and financial advisors.
Understand every cost category
Ask about initial fees, buildout, equipment, technology, training, professional services, opening inventory, royalties, marketing funds, required vendors, management fees, insurance, and working capital. Compare the website estimate with the formal documents and written quotes; if they differ, ask why.
Define territory and development obligations
A territory is not meaningful until its boundaries, rights, exclusions, performance requirements, schedule, and remedies are stated in writing. Multi-location developers should understand when each location must open, what happens if one is delayed, and whether the territory can change.
Separate business management from clinical control
Healthcare arrangements must identify who owns the entity, who employs or contracts with clinicians, who makes medical decisions, and how state rules are satisfied. Licensed professionals must control patient-care decisions. Business support should not interfere with clinical judgment.
Test the assumptions
Ask what data supports the proposed market, staffing plan, payer assumptions, costs, opening timeline, and financial scenarios. Speak with current and former franchisees when disclosures provide their contact information. No responsible opportunity can guarantee patients, revenue, profit, distributions, or investment returns.
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