Before you ink that contract ...

Review the documentation. Each business available for franchise is required to give you a current Uniform Franchise Offering Circular [UFOC], which includes information about the franchisor's history and business model, terms of the agreement, and, often, audited financial statements. The documents easily run 200 pages. "Prospective franchisees get a wealth of information before they sign on a dotted line or pay so much as a nickel," Kaufmann says.

Best of all, it lists all recent litigation, all franchises, and any franchise agreements that were terminated in the past three years. "By all means, pick up the phone," Kaufmann says. Call franchisees and find out if they are successful and getting the support and services they were promised. Some franchises are growing so fast, they can't always deliver. Call the franchisees that were terminated and find out why. Litigation will crop up even in the best of businesses, but a lot of litigation is a red flag.

Figure out the costs. Franchise fees can vary widely, and you only want in if it is a fair deal. Royalties can run between 4 percent and 9 percent of your weekly or monthly gross. Then there's an upfront franchise fee, usually between $10,000 for a new startup to six figures for one of the biggest and best operations. Finally, there's an advertising fee, ranging from $250 a month to 2 percent of sales.

That doesn't include what may be substantial costs of getting up and running. You will need to find a location, renovate, and purchase inventory. In terms of upfront cash, you'll need as little as $40,000 for a one-person business you can run out of a truck (such as a plumbing franchise) to $300,000 to $400,000 to open a fast-food restaurant, Bergenholtz estimates. Don't forget, you should also have a year's worth of savings to live off.

Consult some professionals. At the very least, you'll need to hire an attorney to go over the franchise's documentation and give you an idea if it's a good deal. You may also want to hire an accountant to assess the finances and business consultant to help you sort through options. With their help, you should be able to find out how much control you're giving up, and if the franchisor is asking for too much money relative to the value of the name recognition, training, and support offered. Attorneys can charge $2,500 to $10,000 for a review and negotiate the contract, Kaufmann says.

Watch out for deals with high franchise fees — that could be an indication the parent company is trying to make profits from selling franchises, not from building a strong network of partners. The franchisor should be making most of its money from royalties, so it has an incentive to help you succeed, he says.

Find financing. This is the hardest part of all. Very few franchisors offer financing, but most can give you some direction in finding it. You may find it hard to get a loan from a bank if you don't have a major chunk of cash and aren't willing to pledge your personal assets [such as your house] as collateral. The Small Business Administration has a guarantee program to insure banks against risk of default [see resource box]. It also has a registry of franchises it has already approved loans for, which streamlines the application process.

Franchise resources BusinessWeek Online Partner Franchise Solutions Federal Trade Commission International Franchise Association. American Association of Franchisees & Dealers American Franchisee Association SBA's Franchise Registry

If you can't get a loan from a bank, you may need to turn to friends and family members for help or use your personal lines of credit.

Once you've purchased the franchise, in the best cases, you'll be part of a team that will help you along the way. The parent company will not only show you how to operate the business, but also teach you the basics of finance and cash management. American Leak Detection learned the hard way that some of the best business operators don't know how to manage cash coming in with the cash going out, and has since instituted a financial responsibility course.

Buying a franchise isn't always the fast track to success that it seems. But for the kind of entrepreneur -- someone who does their homework, follows the rules, and craves independence -- it has a lot of advantages. As Bergenholtz puts it: "You get to be in business for yourself, not by yourself." Just keep in mind, seeing the appeal of franchising is often the easiest part of getting started.

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