Discovery day will answer plenty of questions. The ones that decide a kids-franchise deal tend to be answered somewhere else, in the Franchise Disclosure Document (FDD), by the owners who stayed, by the owners who left, and by the building you’d lease.
This checklist sorts 66 questions by who can answer them, in the order you’ll meet those people, and adds a 24-row worksheet for comparing brands side by side.
It also covers what general franchise lists leave out for a kids venue: ride and inflatable rules, supervision ratios, work-hour limits for teenage staff, and a revenue calendar that peaks when school is out.
The Checklist on One Page
The whole process in eight stages, with who answers at each one and the check that tends to decide it.
Stage | Who answers | The check that decides it |
|---|---|---|
Before you start | You | Enough cash to cover the fees and the opening losses |
Reading the FDD | The filing | Exits and signed-but-unopened units in Item 20 |
Early calls and discovery day | The franchisor | Written backup for any earnings figure |
Validation calls | Current owners | How long break-even took, against the working capital Item 7 budgets |
Exit interviews | Former owners | Why they left and what they had to sign |
Territory and site | The market and the landlord | Children in the territory, and ceiling height |
Staffing and safety | Your state and your insurer | Ride permits, supervision ratios and the insurance quote |
Final review | Your lawyer and accountant | The release, the non-compete and the working capital line |
Each row has its own section below, with the full questions.
Start With Your Own Answers
A franchisor is screening you while you screen it, and some answers only you can give. Settle these six before the first call.
1. Does your cash cover the high end of the Item 7 range, not just the low end?
2. Will you run the business yourself or hire a manager, and does Item 15 allow a manager?
3. Can you work when families play, which means weekends, school holidays and most of the summer? A kids venue does its best business in exactly the hours other owners take off, so the schedule is the job.
4. Do you want a business built around children, parents, parties and noise, every week?
5. What else competes for family weekends within a short drive of where you’d open?
6. How many months could you go without drawing a salary?
The Brand-by-Brand FDD Worksheet
Use one column per brand and fill it in straight from each brand’s FDD. Each row is one line on purpose. The reasoning behind every row is in the guide to reading an FDD, and the rows follow the order of the document itself.
# | Check | Where it sits | Brand A | Brand B | Brand C |
|---|---|---|---|---|---|
1 | Issuance date, and whether a newer FDD is due | Cover page | |||
2 | Risks listed on the Special Risks page | Front pages | |||
3 | Ride, inflatable and supervision rules flagged | Item 1 | |||
4 | Lawsuits and bankruptcies disclosed | Items 3 and 4 | |||
5 | Franchise fee, and which parts are refundable | Item 5 | |||
6 | Play equipment price, required supplier, and when payment is due | Items 5 and 8 | |||
7 | Royalty, advertising fund, and local advertising minimum | Item 6 | |||
8 | What "Gross Revenue" includes, and whether it’s based on what customers paid or on list price | Item 6 notes | |||
9 | Total investment range, and the share paid to the franchisor or its affiliates | Item 7 | |||
10 | Months of working capital the estimate assumes | Item 7 | |||
11 | Franchisor’s revenue from required purchases, divided by open franchised units (calculate) | Items 8 and 20 | |||
12 | Equipment usable life and refurbishment cycle | Item 8 and the franchise agreement | |||
13 | Required insurance limits and additional insureds | Item 8 | |||
14 | Training hours in total, and hours at your location | Item 11 | |||
15 | Typical months from signing to opening, and the opening deadline | Item 11 | |||
16 | How the territory is measured, and what "exclusive" leaves out | Item 12 | |||
17 | Whether you must run the business personally | Item 15 | |||
18 | Term, renewal conditions, release, transfer fee and non-compete | Item 17 | |||
19 | Whether Item 19 exists, units covered out of units open, and gross sales or profit | Item 19 | |||
20 | Exits over three years, compared with outlets at the start (calculate) | Item 20, third table | |||
21 | Agreements signed but not yet open | Item 20, fifth table | |||
22 | Confidentiality-clause statement, and any franchisee association listed | Item 20 | |||
23 | Audit opinion, and cash on hand | Item 21 | |||
24 | What your state’s addendum changes | State addenda exhibit |
Row 11 turns a disclosure into a per-unit figure. Item 8 must state what the franchisor took in from franchisees’ required purchases in its last fiscal year. Divide that by the franchised outlets open at year end in Item 20. As a hypothetical, $600,000 across 20 units means $30,000 of each unit’s yearly spending went to the franchisor through required purchases, separate from royalties.
Row 20 counts how many units left the system. From Item 20’s third table, add up terminations, non-renewals, reacquisitions by the franchisor and outlets that ceased operations across all three years, then compare the total with the outlets open at the start of the first year. As a hypothetical, 6 exits against 30 starting outlets is a fifth of the system in three years. Transfers sit in their own table and aren’t exits, though a cluster of them deserves a question.
The same worksheet is also a free spreadsheet download, with rows 11 and 20 calculated for you and a grid for recording your validation calls.
Questions for the Franchisor and Discovery Day
Ask these on the early calls, and keep a list of whatever stays unanswered. Discovery day, the visit to meet the leadership team, is where that list goes.
1. Is this the most recent FDD, and is an update due before I’d sign?
2. Who is paid to sell me this franchise, and how? The receipt at the back of the FDD (Item 23) must name every franchise seller involved, and the Federal Trade Commission (FTC) warns in its franchise buyer’s guide that brokers often work for franchisors and are paid only if a sale is made.
3. Can I see the written substantiation for your Item 19 figures? Any Item 19 must state that substantiation is available on reasonable request, so asking for it is routine, and a refusal tells you something.
4. What have new owners spent in the last two years that Item 7 doesn’t show?
5. Which fees have changed in the last three years, and which can change during my term?
6. How many units opened last year, how many closed, and why did they close?
7. Why haven’t the owners with signed but unopened agreements opened yet?
8. Who supports me after opening, and how many locations does that person cover?
9. How is the advertising fund spent, and do owners have any say?
10. How does the party program work, from the booking system to the packages to who sets the prices?
11. Which waiver and incident-reporting systems are required, and who pays for them?
12. When must the play equipment be replaced, and what would a replacement cost today? Item 7 only budgets for opening, so a replacement cycle written into the franchise agreement is a future cost that appears nowhere in the investment estimate.
13. Is there a group insurance program, and what do owners pay under it?
14. What do you expect from me in the first year, in hours and in local marketing?
Discovery day is part of the sale as well as the evaluation. Schedule it after your validation calls, and bring the questions the owners couldn’t settle.
How to Run Validation Calls
A validation call is a conversation with a franchisee about what the franchisor has told you. The FTC’s Consumer’s Guide to Buying a Franchise says talking to current and former franchisees may be the most reliable way to verify a franchisor’s claims. Five habits make the calls count.
Choose the names yourself. Item 20 lists current franchisees with their outlets’ addresses and phone numbers, though a large system may list only those in and around your state. It also lists everyone who left in the last fiscal year or had lost touch with the franchisor in the 10 weeks before the FDD was issued. Pick from those lists rather than calling only the references the sales team suggests.
Cover three groups. Owners open just over a year remember the launch. Owners open about five years know whether the system keeps its promises. Former owners know why people leave. The FTC’s guide suggests questions for all three.
Read the fine print first. If franchisees have signed clauses limiting what they can say about the system, Item 20 must carry a statement saying so. It also lists any franchisee association the franchisor created or endorsed, or that is independently organized and asked to be included, and that association’s officers are worth a call of their own.
Call on a weekday morning. A kids venue on a Saturday afternoon has no time for you, and an owner in the middle of a party won’t give you the answer you need.
Keep one grid. Ask every owner the same questions and record the answers the same way, so three brands can be compared line by line.
Questions to Ask Current Franchisees
The FTC’s list is the base, and the kids-venue questions are the ones most lists skip. Owners can talk about their own numbers in a way the franchisor can’t outside Item 19.
1. What was your total investment, and how did it compare with the Item 7 range?
2. How long did it take from signing to opening, and what caused any delay?
3. How many months did it take to break even? Compare the answer with the months of working capital Item 7 assumes. If owners describe a ramp-up twice that long, budget for theirs.
4. How long did your working capital last?
5. What share of your revenue comes from birthday parties and group bookings? In a party-driven venue, that share decides how weekends are staffed and how exposed you are if bookings dip.
6. How do weekdays compare with weekends, and school terms with summer?
7. What did training cover, and what did you have to learn on your own?
8. When something breaks on a Saturday, how fast does support respond?
9. How do required supply prices compare with what you could buy elsewhere?
10. What does your liability insurance actually cost, and did it match the estimate?
11. How is the play equipment holding up, and what have repairs cost so far?
12. How hard is it to hire and keep staff, and how young is your team?
13. Is the advertising fund bringing families through the door?
14. What problems have you had with the franchisor, and how were they settled?
15. Would you buy another unit? Ask it last. The length of the pause is part of the answer.
Questions to Ask Former Franchisees
Former owners are the hardest calls to arrange and often the most useful. Item 20’s list of those who left gives a name, city, state and phone number for each.
1. When did you open, and how long did you operate?
2. Why did you leave the system? Ask it early and again at the end, once the conversation has warmed up.
3. Did you break even or make a profit?
4. What did you have to sign on the way out?
5. What happened to the lease and the play equipment?
6. What would you check now that you didn’t check then?
7. What was your background before you bought?
Territory and Site Questions
A kids venue needs a large, tall, well-parked space inside a territory with enough families, and several of these answers come from the landlord and the city rather than the franchisor. A separate guide to site selection for indoor play franchises covers the building in more depth.
1. How is my territory measured, by radius, zip codes, total population or number of children?
2. How many children live inside it, by the franchisor’s count and by public census figures?
3. What may the franchisor or its affiliates do inside my territory?
4. Does keeping the territory depend on hitting a sales target?
5. What footprint and ceiling height does the format need? Tall inflatables and climbing structures rule out many standard retail units, which narrows the search before rent enters the conversation.
6. Does zoning allow an amusement or assembly use at the site, and at what occupancy limit?
7. Is there parking for a Saturday with back-to-back parties?
8. Can the lease be made contingent on franchise approval, permits and financing?
Staffing and Safety Questions
This is where a kids venue differs most from other franchises. Item 1 must describe laws specific to the industry, but usually only in general terms, and the specifics are yours to confirm with your state, your insurer and federal labor rules.
1. Does my state regulate inflatables as amusement rides? Texas, for example, counts inflatable rides as amusement rides, requires a yearly inspection sticker, and requires liability cover of $1,000,000 per occurrence for them.
2. What inspection, permit and sticker process applies, and how often?
3. Is the equipment built and maintained to ASTM F2374, the standard practice for inflatable amusement devices, and who inspects it, and how often?
4. Does my state set a staff-to-child supervision ratio for rides or play areas?
5. How will I schedule 14- and 15-year-old staff within federal limits? Federal child labor rules cap them at 3 hours on a school day and 18 hours in a school week, and at 8 hours a day and 40 a week when school is out. Work must fall between 7 a.m. and 7 p.m., with the evening limit moving to 9 p.m. from June 1 through Labor Day.
6. Do state child labor rules add limits of their own?
7. What background checks does the system require for staff who supervise children?
8. What waiver and incident process does my insurer require, and what does cover cost at the franchisor’s required limits?
Questions for Your Lawyer and Accountant
The FTC recommends a lawyer experienced in franchise matters, and a franchise attorney should read the agreement itself, not just the FDD’s summary of it. Before either meeting, check for complaints about the franchisor with your state’s securities or franchise regulator, which the North American Securities Administrators Association (NASAA) lists in its directory of state regulators, and with the Better Business Bureau, as the FTC guide suggests.
For your lawyer
1. What would the release I sign to renew or sell make me give up?
2. What does the personal guarantee cover, and for how long?
3. How far and for how long does the non-compete reach after the franchise ends?
4. Do the lease and the franchise agreement line up on term, default and assignment?
For your accountant
5. Is the Item 21 audit opinion clean, and can the franchisor afford the support it promises?
6. What does a profit and loss statement (P&L) built from the validation-call answers show?
7. Does the working capital in Item 7 cover the ramp-up owners actually described?
8. If I’m financing through the Small Business Administration (SBA), is the brand in the SBA Franchise Directory? The SBA says a brand must be listed for its franchisees to get SBA financing. Financing a kids franchise has other routes as well, covered in a separate guide.
Red Flags That End the Conversation
Any one of these is a reason to stop, or at least to slow down until it’s resolved in writing.
1. Pressure to sign or pay before 14 calendar days have passed since you received the FDD.
2. Earnings figures offered in conversation that don’t appear in Item 19.
3. No written substantiation for Item 19 when you ask for it.
4. A closing questionnaire or acknowledgment asking you to confirm you relied only on the FDD, or that nobody told you anything outside it. Federal rules bar franchisors from making you waive reliance on the FDD, and a NASAA policy on franchise questionnaires, in effect since 2023, restricts statements like these in the states that apply it.
5. References chosen only by the franchisor, or reluctance when you call names from Item 20 yourself.
6. High exits over three years, or a long queue of agreements signed but not yet open.
7. No clear answer on when the play equipment must be replaced or what that will cost.
8. A newer FDD that is due, or already issued, and hasn’t been sent to you.
The Week Before You Sign
Six checks for the last week.
1. The FDD you’re signing against is still the current one.
2. At least 14 calendar days have passed since you received it, and 7 more since any change the franchisor made to the agreement on its own.
3. You’ve read your state’s addendum, since it overrides parts of the agreement.
4. Financing is committed in writing.
5. Insurance is quoted at the franchisor’s required limits.
6. The lease contingency is in place.
Your Next Step
Work through the worksheet for every brand on your list, on paper or in the spreadsheet version, then let the calls fill in what the filings can’t. The brand that still looks right after both is the one worth a lawyer’s time.
If indoor play is on your shortlist, ask the Funbox franchise team for our current FDD and run this checklist on it.
Fill in the worksheet. Make the calls. Sign last.
Frequently Asked Questions
What questions should I ask before buying a franchise?
Ask the franchisor about costs outside Item 7, fee changes, closures and who is paid to sell to you. Ask current and former owners about break-even, support and why people leave. Ask your lawyer about the release and non-compete, and ask yourself whether your cash and schedule fit.
What is a franchise validation call?
A validation call is a conversation with a current or former franchisee, picked from the lists in Item 20 of the FDD, to check what the franchisor has told you. Choose the names yourself, and include owners who left as well as those still operating.
How many franchisees should I call?
There’s no set number. Cover three groups, owners open just over a year, owners open about five years and former owners, and keep calling until the answers start repeating. If every call sounds rehearsed, widen the list rather than stopping.
What happens at a franchise discovery day?
Discovery day is a visit, often to the franchisor’s head office or an open location, to meet the leadership team and see the business run. It’s part of the sale as well as the evaluation, so bring the questions your validation calls left unresolved.
Can a franchisor tell me how much I’ll make?
Only through Item 19 of its FDD, which is optional. Any earnings figures must appear there with a basis you can check, and the franchisor must make written substantiation available on reasonable request. Figures offered outside Item 19 are a red flag.
What’s different about due diligence for a kids franchise?
A kids venue adds rules most franchises never meet. Your state may regulate inflatables as amusement rides and set supervision ratios, federal law limits hours for teenage staff, and revenue leans on weekends, school holidays and parties. Equipment wear and replacement belong in the numbers too.
Sources
1. Federal Trade Commission, "A Consumer’s Guide to Buying a Franchise," September 2020 (page last modified December 2023). Accessed September 2026. https://www.ftc.gov/business-guidance/resources/consumers-guide-buying-franchise
2. Federal Trade Commission, Franchise Rule, 16 CFR 436.2 (timing of disclosure), eCFR. Accessed September 2026. https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-436/subpart-B/section-436.2
3. Federal Trade Commission, Franchise Rule, 16 CFR 436.5 (the disclosure Items, including Items 19, 20 and 23), eCFR. Accessed September 2026. https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-436/subpart-C/section-436.5
4. Federal Trade Commission, Franchise Rule, 16 CFR 436.9 (additional prohibitions, including waivers of reliance), eCFR. Accessed September 2026. https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-436/subpart-D/section-436.9
5. North American Securities Administrators Association, Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments, adopted September 2022, effective 1 January 2023. https://www.nasaa.org/adopted-model-stmt/statement-of-policy-franchise-questionnaires-and-acknowledgments/
6. North American Securities Administrators Association, Contact Your Regulator. Accessed September 2026. https://www.nasaa.org/contact-your-regulator/
7. Texas Department of Insurance, Amusement ride FAQ (inflatable rides, inspection stickers and insurance). Accessed September 2026. https://www.tdi.texas.gov/commercial/lcamuseinfo.html
8. ASTM International, F2374-24, Standard Practice for Design, Manufacture, Operation, and Maintenance of Inflatable Amusement Devices. https://store.astm.org/f2374-24.html
9. U.S. Department of Labor, child labor hours standards for 14- and 15-year-olds, 29 CFR 570.35, eCFR. Accessed September 2026. https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-A/part-570/subpart-C/section-570.35
10. U.S. Small Business Administration, SBA Franchise Directory. Accessed September 2026. https://www.sba.gov/business-guide/plan-your-business/buy-existing-business-or-franchise/sba-franchise-directory
