When purchasing a franchised business, there is a level of due diligence that should be conducted over and above the usual examination of the business and its records: the analysis of the franchisor and the franchise system as a whole.
Properly completed disclosure documents, that are compliant with the Franchising Code of Conduct, contain much informative, relevant and useful data about the franchisor.
However, franchisees must keep in mind that disclosure documents may not have been completed properly or may provide only the bare minimum of information required under the Code. These documents are usually only updated annually and as a result, some of the data may be outdated. Franchisors often forget or neglect to review their disclosure documents to update obsolete information.