We Turned Away 13 Franchise Buyers Last Year. Here’s How to Tell If a Franchise Is Actually Legit.

Last year, Little Boomers Basketball turned away 13 people who wanted to buy a franchise.

They had the money. They were ready to sign.

The founder said no anyway.

That’s not how most franchise conversations go. Most of them are about being sold to.

But if you’re trying to work out how to tell if a franchise is legit before you hand over your family’s savings, a franchisor saying no to people is actually a good sign.

This article is based on a recent Courtside Conversations episode with Little Boomers Basketball CEO, Emile Koorey.

Watch the full video:

How Do You Actually Know If a Franchise Is Legit?

Start with research, not excitement.

Most people skip this step. They fall in love with the idea of owning a franchise and stop looking too closely at the brand itself.

A proper check has four parts. Search the brand thoroughly on Google, including the founding story and the company website. Look up the founder and the franchisees on LinkedIn to see how long they’ve actually been there. Search the franchise disclosure registry, which every legitimate franchisor in Australia is legally required to update once a year. And read the Google reviews with an honest eye.

The disclosure registry is the one most people have never heard of. It shows when the brand was established, how many active franchises exist, what territories are taken, and whether there’s any litigation attached to the name.

If you want to understand what a transparent franchise model looks like from the inside, the Little Boomers Basketball franchise page is a good place to start.

Is a Slow Application Process a Warning Sign?

No. It’s usually the opposite.

A franchise that puts you through several steps before you can sign isn’t slowing you down for no reason. It’s protecting the quality of its network.

Little Boomers Basketball’s own process runs through a discovery call, a business presentation, a refundable deposit to hold a territory, a three-day workshop alongside a real franchisee, and homework that includes calling three existing franchisees. Only after all of that does a franchise agreement get issued.

One bad franchisee in a network can ruin the entire brand, and that’s the whole reason the process is built this way.

Compare that to a brand that asks for a deposit the moment you inquire, before you’ve had time to think. That’s not efficiency. That’s a franchisor more interested in the sale than the fit.

Should You Only Talk to the Franchisees You’re Introduced To?

No. You should be free to call anyone in the network.

The people who will tell you the truth about a brand aren’t in head office. They’re the ones already running it day to day.

If a brand only offers you a handful of hand-picked franchisees to speak with, or discourages you from calling around at all, take that seriously.

Go beyond questions about revenue and profit. Ask how head office support has actually felt in tough times. Ask if any fees showed up after signing that nobody mentioned beforehand. Ask what caught them off guard in the first year.

What If a Franchise Guarantees You’ll Make Money?

Walk away.

No legitimate franchisor can promise you a specific income. Too much depends on the individual franchisee: how fast they respond to leads, how much time they put in, the local market they’re working in.

Misrepresentation of earnings is currently one of the most common legal disputes in franchising. It happens when a franchisor promises a number and the franchisee never gets close to it.

A responsible brand will show you a realistic range instead. Across the Little Boomers Basketball network, return on investment has typically landed somewhere between six months and eighteen months. That’s a range built from real data, not a promise.

What Should You Ask About Fees Before You Sign?

Ask about the marketing levy.

Most franchise systems include a shared marketing fund that every franchisee contributes to, often a percentage of revenue. It’s one of the largest recurring costs in franchising, and a lot of buyers don’t find out it exists until after they’ve signed.

By law, that money can only be spent on marketing. Not on propping up underperforming stores, and not on head office upgrades. A well-known Australian bakery franchise ran into exactly this problem a few years ago, redirecting its marketing fund into struggling locations. Franchisees pushed back, and the brand no longer exists.

There’s one more legal protection worth knowing about. Once a franchise agreement is issued, you’re not allowed to sign it straight away. There’s a mandatory 14-day consideration period built into the franchise code of conduct. If anyone is rushing you past that window, that’s not enthusiasm. That’s pressure.

Common Mistakes People Make

“If I’m excited about it, that’s proof it’s the right move”

Excitement and due diligence are two different things. The most experienced buyers still do the research, even when they’re already sold on the idea.

“A fast sign-up process means the brand is efficient”

It usually means the opposite. A brand that isn’t selective about who it lets in isn’t protecting its own network.

“I’ll just call the franchisees they recommend”

Those are often the happiest few, handpicked for a reason. Ask for the full list, or find franchisees on your own through LinkedIn or local searches.

“A guaranteed income figure means less risk for me”

It means more risk. No one can guarantee an outcome that depends on your effort and your local market.

“The marketing levy is just a minor admin fee”

It’s usually the second biggest recurring cost after the royalty fee. Ask exactly how it’s spent and how often it’s reported.

“Once I sign, I’m locked in immediately”

By law, you get a 14-day cooling off period after the agreement is issued. Never let anyone rush you through it.

Key Takeaways

• A long, multi-step recruitment process is a green flag, not a red one
• Every legitimate franchisor must update a public disclosure document once a year
• You should be free to call any franchisee in the network, not just the ones you’re introduced to
• A guaranteed income figure is one of the clearest red flags in franchising
• Every franchise has a marketing levy or similar recurring fee, and it can only legally fund marketing
• You get a 14-day cooling off period after a franchise agreement is issued
• The strength of a franchise network comes down to the quality of the franchisees already in it

FAQ: Common Questions People Ask

1. How do I check if a franchise is legally allowed to operate?

Search the franchise disclosure registry for the brand. It’s a public, mandatory record updated annually, showing when the brand started, how many franchises are active, and any litigation history.

2. Is it normal for a franchise application to take weeks or months?

Yes, and it’s a good sign. A brand that runs you through discovery calls, workshops, and reference checks is protecting the quality of its network, not wasting your time.

3. Should I worry if a franchise won’t guarantee my income?

No, you should worry if they do. A responsible franchisor shows you real, documented ranges instead of promises.

4. Can I really call any franchisee I want?

In a legitimate network, yes. If a brand limits who you can speak to, or avoids the question, that’s worth noticing.

5. What if my partner isn’t sure this is the right move yet?

That’s normal, and worth slowing down for. Most people research a franchise together, and a good franchisor expects both of you in the room asking questions.

Keen to Learn More?

Emile covers topics like this every week on his YouTube channel.

You might also find our post on the 5 Red Flags You Should Never Ignore Before Choosing a Franchise useful while you’re weighing things up.

If any of this has you thinking more seriously about franchising, you can book a free Discovery Call with Emile.

No pressure, no pitch. Just a conversation to find out if it fits your life.