Item 22 of every Franchise Disclosure Document contains something most franchise buyers overlook entirely: a complete list of every current franchisee in the system, along with their contact information.

This list is not a courtesy. It is a federally mandated disclosure. The FTC requires franchisors to provide it because regulators recognized decades ago that the most reliable information about a franchise system comes from the people already operating inside it — not from the franchisor's sales team.

Most buyers glance at the list and move on. The buyers who use it well — and who know what to ask — make dramatically better decisions.

Why Most Buyers Skip Validation Calls

The franchise sales process is designed to create momentum. By the time you receive the FDD, you have typically had multiple conversations with the franchisor's development team, attended a webinar or two, and possibly visited a Discovery Day. You are emotionally invested. The deal feels real.

Calling strangers to ask probing questions about their finances and their relationship with the franchisor feels awkward. It slows things down. The development rep may subtly discourage it by saying things like "our franchisees are very busy" or "we have a few reference franchisees we can connect you with."

That last phrase — "reference franchisees" — is a red flag. A reference franchisee is a franchisee the franchisor has pre-selected to speak with prospects. They are, by definition, the franchisees most likely to say positive things. They are not a representative sample.

Item 22 gives you the full list. Use it.

What the Research Shows

A 2023 survey by Franchise Business Review asked franchisees to reflect on their pre-purchase due diligence. The findings were stark:

• Franchisees who conducted 5 or more validation calls with current franchisees reported satisfaction rates 41 percent higher than those who made no calls
• Franchisees who specifically contacted former franchisees — those who had left the system — were 3.2 times more likely to identify material concerns before signing
• Among franchisees who reported significant financial distress within 3 years of opening, 73 percent had conducted fewer than 2 validation calls before signing
• Among franchisees who reported meeting or exceeding financial expectations, 68 percent had conducted 5 or more calls, including at least one with a former franchisee

The correlation is not subtle. Validation calls are one of the highest-leverage activities in franchise due diligence.

The Former Franchisee Problem

Item 22 also requires franchisors to disclose franchisees who left the system in the prior fiscal year — including those who were terminated, did not renew, or transferred their franchise. This list is often buried or presented in a way that discourages contact.

Former franchisees are your most valuable source of unfiltered information. They have no ongoing relationship with the franchisor to protect. They have already made their decision. And they often have very specific things to say about why.

A 2024 analysis of franchise litigation data found that in 78 percent of cases where franchisees successfully sued franchisors for misrepresentation, the plaintiffs reported that they had not contacted former franchisees before signing. In cases where franchisees had contacted former franchisees, the rate of subsequent litigation dropped by more than half.

What to Ask — and What Not to Ask

Most buyers who do make validation calls ask the wrong questions. They ask things like "Do you like the brand?" and "Would you do it again?" These questions invite positive, socially comfortable answers.

An advisor helps you ask questions that surface real information:

On financial performance:

• "What was your gross revenue in year one, year two, and year three?"
• "What is your actual owner's discretionary income after all expenses including your own salary?"
• "How does your actual performance compare to what you expected based on Item 19?"

On the franchisor relationship:

• "How responsive is corporate support when you have a problem?"
• "Have you ever had a dispute with the franchisor? How was it resolved?"
• "Are there things the franchisor does that you wish you had known about before signing?"

On operations:

• "What was harder than you expected?"
• "What would you do differently if you were starting over?"
• "Are you aware of other franchisees in the system who have struggled or closed?"

On the former franchisee list:

• "Do you know why [specific former franchisee] left the system?"

That last question — asked of current franchisees about former ones — often produces the most candid answers in the entire due diligence process.

How an Advisor Amplifies Validation Calls

An experienced franchise advisor brings three things to the validation call process that most buyers cannot replicate on their own:

1. A structured framework. Advisors have conducted hundreds of these calls across dozens of franchise systems. They know which questions produce useful answers and which ones get deflected.

2. Pattern recognition. When an advisor hears the same concern from three different franchisees in different markets, they recognize it as a systemic issue rather than an individual complaint. A first-time buyer hearing the same thing might not connect the dots.

3. Access to former franchisees. Advisors who work in the franchise space often have existing relationships with former franchisees who are willing to speak candidly — relationships that a prospective buyer cannot build from scratch in a 30-day due diligence window.

The BizLinx Approach

Our advisory service includes facilitated franchisee validation calls as a standalone engagement. We identify the right franchisees to contact based on your target market and investment profile, design the question framework, and in many cases facilitate the conversations directly.

The goal is not to talk you out of a franchise. The goal is to make sure you are buying the franchise you think you are buying — not the one the development team described.

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Before you sign, talk to the people already inside the system. Score your FDD free with FDD Score™ and book an advisor call to design your validation strategy.