Beyond the Binder: Item 2-Business Experience
In Part 1 of this series, we looked at Item 1 of the Franchise Disclosure Document (FDD) and how to investigate who really owns and operates the franchise system. Now it is time to focus on Item 2: Business Experience, the section that introduces the people behind the franchise.
Franchisors love to highlight impressive titles, years of experience, and former roles in big-name companies. But glossy bios can be misleading. Your job as a prospective franchisee is to figure out whether the leadership team actually has the experience to support you, grow the system, and guide franchisees through challenges.
Here is how to dig deeper.
1. Verify Executive Histories
Item 2 lists the key executives and their business experience over the past five years. This may include CEOs, COOs, franchise sales directors, and field support leaders.
What to do:
Look them up on LinkedIn and cross-check their job titles and dates with what is in the FDD
Search for past companies they worked at, were those companies successful? Did they have any involvement in failed franchises?
Look for red flags like unexplained gaps or short stints at multiple companies
Impressive titles do not mean much if they were figureheads or joined after key failures occurred.
2. Look for Franchise-Specific Experience
A former VP at a Fortune 500 company might look good on paper, but running a franchise system is very different from corporate leadership. Item 2 should show whether key personnel have actually operated franchise units, supported franchisees, or led system growth.
What to do:
Check whether anyone on the team has real franchising experience, not just generic business roles
Look for signs they have managed franchise relationships, field support, or training systems
Ask: Has this team ever scaled a franchise system successfully before?
A franchise run by executives with no franchise experience is a recipe for trouble.
3. Look for Turnover in Key Roles
Item 2 only shows current executives. It does not disclose who has left or why. High leadership turnover is often a sign of internal chaos or shifting strategies.
What to do:
Ask the franchisor for a list of prior executives who have left in the last three years
Search LinkedIn for former employees and see how long they stayed
Ask current franchisees whether leadership changes have impacted support or consistency
A revolving door at the top often means a rocky experience at the unit level.
4. Connect Backgrounds to Current Performance
Look at Item 2 in the context of the system's performance. If the franchise is experiencing high turnover, litigation, or slow growth, ask how the leadership team has responded.
What to do:
Compare executive backgrounds to the realities described in Item 20 (closures and transfers)
Ask: What has this team done to improve franchisee outcomes?
Request specific examples of how leadership supports new and struggling franchisees
Bios mean nothing if the system is failing under their watch.
5. Legal and Regulatory Background Checks
You will learn more about lawsuits in Item 3, but Item 2 gives you the names to search.
What to do:
Search court records and regulatory actions using executive names
Check for prior involvement in failed franchise systems, fraud claims, or regulatory violations
Look for patterns of executives jumping from one troubled brand to another
Franchise executives who have left a trail of closures, lawsuits, and unhappy franchisees are a serious red flag.
Item 2 is more than a resume section. It is your chance to evaluate whether the people leading the franchise system have the skills, experience, and integrity to guide franchisees like you.
Do not take their bios at face value. Ask hard questions, verify claims, and connect the dots between leadership and system performance.
In Part 3, we will move to Item 3: Litigation and show you how to uncover the legal history that might reveal much more than the franchisor wants you to see.
Because once you sign, it is too late for a reality check.
