How We Vet
Visa Eligible
Businesses

We go through these items for any litigation and bankruptcy which have been disclosed by the franchisor. In the case that any have been disclosed. We then review its nature, and whether they were related to the franchisor’s practice, amongst other factors. In the case that no litigation or bankruptcy is disclosed, we may conduct a separate, external search to see if there are any undisclosed court and/or bankruptcy cases.

At this stage we review the ongoing fees and ensure there are no abnormal costs or fees being charged by the franchisor. These might entail fees that are not generally charged by industry competitors or fees that charge an amount higher than the industry average. If any abnormalities are found, we then contact the franchisor for further context.

We confirm through this step that the total franchise initial investment amount is within our threshold of $250,000 In the case that it is, we then double check the costs associated with the franchisee’s initial investment for any abnormal costs that must be clarified. Additionally, for franchises where the investment amount surpasses our stipulated $250,000, we may also conduct a further analysis so as to better understand the reasoning behind such prior to making a final decision(i.e. Food and Beverage franchises often surpass this initial investment threshold).

This item refers to existing franchisees past financial performances and the business may or may not disclose this item on their FDD. In the case of the former, we review the metrics shared by them especially when it comes to the total revenue amount, cost-expense projections, among others. In case that they do not disclose an Item 19, we then have a follow-up call with the franchisor to review any additional information they might be willing to disclose with us at this time.

Yearly, the franchisor discloses their total unit count for company-owned and franchise outlets. By reviewing the latter, we can identify whether the company is growing or shrinking in size. In the case that there are a significant number of closures and transfers our team reviews the reasons behind such by jumping on a call with the franchisor.

We also review the franchisor’s or parent company’s Balance Sheet, Statement of Operations & Cash Flow from the past three years. In doing so, our team can compare how the franchisor has performed with what they shared with us during our initial conversations. In addition to this, we also consider other items such as whether the franchisor has any long-term debt and, what the ratio of royalty to franchise fees currently is for their revenue, amongst others.

Based on the expected profit margin per unit and the franchise’s initial investment midpoint, we are able to calculate an estimate of a franchisee’s return on investment. We simulate these numbers based on different scenarios that will generate margins between 10% and 30% and will further assist us when profiling the best opportunity for our clients.

Our team runs a simulation on the revenue and cost projections that a single unit franchisee owner may face during a year. This is done considering base and high projections as well as how these numbers should look after three years. Once the simulation is complete, we can then better estimate the owner’s benefit (profit) and which expenses will be the most significant for our clients.

Once all these steps have been completed, our due diligence document then goes through a two-step review by senior members of our Product Development team. In case further questions are raised during this stage, our team schedules additional calls with the franchisor so as to address and clarify such matters. Otherwise, our initial vetting process is complete, and we now move on to finalizing our franchise onboarding process.