Chick-fil-A's franchise structure is unique. They cover the build-out costs for a low entry fee but take a 15% royalty and 50% of profits. This structure effectively makes the operator a highly compensated manager with significant income but without the equity upside or multi-unit potential of a traditional owner.

A significant ethical concern involves pitch intermediaries charging fees to both the client and the winning agency. This "double dipping" creates a conflict of interest that can skew the selection process, undermining the goal of finding the best partner.

It's common for a highly experienced agency leader to handle the sales process, only to pass the daily work to a junior-level employee after the contract is signed. To prevent this bait-and-switch, ask to meet the specific team members who will manage your account day-to-day before you commit.

Franchising has evolved beyond a mom-and-pop model into a sophisticated asset class. Private equity firms and former investment bankers are now actively acquiring and rolling up large franchise portfolios, signaling a shift towards treating them as major institutional investments.

Businesses are often sold by a senior, experienced agency leader, only to be handed off to a junior-level employee for the actual work. During the sales process, you must explicitly ask who you will be working with daily, confirm their experience, and even request to speak with them directly.

Instead of focusing on long-term commitments, ask a potential agency what happens if you want to end the contract early. A truly confident partner, who believes in the results they can deliver, won't try to trap you with hidden fees or restrictive clauses.

The most effective due diligence involves finding franchisees not on the franchisor's reference list and asking them one key question: 'Knowing everything you know now, would you do this again?' Their unfiltered answer provides a clear signal about the business's true challenges, profitability, and franchisor support.

Gatekeepers like Zillow charge referral fees. Future AI platforms will be more ruthless, calculating your exact profit margin and charging just below it for a lead. The only defense is to build a strong, independent brand that attracts customers directly, making you less reliant on these future tollbooths.

Founders often see franchising as a way to scale without managing more employees. However, it shifts the people problem to managing franchisees. This requires enforcing brand standards and managing underperformers who are also business owners, a group that can consume 80% of your time.