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FAQFrequently asked questions about franchises in the United States
General answers about the franchise model, investment, the buying process and investor visas.
About the model
What is a franchise?
It is a business model in which a company (the franchisor) grants another person or company (the franchisee) the right to operate under its brand, system and support, in exchange for an initial fee and ongoing payments such as royalties and marketing fund contributions.
Do I need prior experience?
It depends on the franchisor. Some brands do not require industry experience and provide training; others ask for management or industry experience.
Can I own a franchise without running it myself?
Some brands allow semi-absentee models with a manager in charge; others require an owner-operator. If you are seeking a visa such as the E-2, the investor must direct and develop the business.
How long does a franchise agreement last?
Usually between 5 and 20 years, with renewal options under certain conditions. The term and renewal terms appear in the agreement and in Item 17 of the FDD.
What if I want to sell my franchise?
Most agreements allow a transfer with franchisor approval and a transfer fee. Review these terms before signing.
What is an exclusive territory?
An area where the franchisor agrees not to open another unit of the same brand. Not all brands offer it; it is described in Item 12 of the FDD.
About the investment
How much does it cost to buy a franchise?
It depends on the brand, industry, location and format. In the U.S., the franchisor must detail the estimated initial investment in Item 7 of the FDD, including the franchise fee, location, equipment, inventory and working capital. Ongoing fees appear in Item 6.
What are royalties?
Periodic payments to the franchisor, usually a percentage of gross sales, for the ongoing use of the brand and support.
How long does it take to recover the investment?
It varies widely by business, location and management. No result is guaranteed; if the brand publishes an Item 19, use it with an accountant to build your own projections.
Can I finance part of the investment?
Options include bank loans, franchisor financing or, in some cases, retirement funds. Since March 1, 2026, SBA 7(a) and 504 loans require 100% of the owners to be U.S. citizens or nationals, so foreign investors usually invest with their own capital.
What is working capital?
The money you need to cover payroll, rent, inventory and other expenses during the first months, while the business reaches break-even.
About the buying process
What is the FDD?
The Franchise Disclosure Document is the disclosure document the franchisor must give to prospective franchisees. It has 23 sections covering the company, costs, obligations, litigation, units and financial statements.
How long do I have to review the FDD?
Under the FTC Franchise Rule, you must receive it at least 14 calendar days before signing a binding agreement or making any payment.
How long does the process take from research to opening?
As a general reference, 6 to 12 months, depending on finding a location, build-out, permits and, if applicable, the immigration process.
Should I talk to other franchisees?
Yes. Item 20 includes contacts for current franchisees and those who left the system. It is one of the best sources for understanding how the business really works.
Do I need an attorney?
It is highly advisable to work with a franchise attorney to review the FDD and agreement, and with an accountant for financial projections.
About visas and immigration
Does buying a franchise give me a visa?
Not automatically. The investment can be part of an application, for example for an E-2 visa, but approval depends on meeting all immigration requirements.
What is the minimum investment for the E-2 visa?
There is no fixed minimum. The investment must be substantial relative to the total cost of the business and sufficient for it to operate successfully.
Does my country have an E-2 treaty?
Many Latin American countries do, such as Mexico, Colombia, Argentina, Chile and Costa Rica; others, such as Brazil or Venezuela, do not. Check the official U.S. Department of State list.
Can my family come with me?
Under the E-2 and L-1, the spouse and unmarried children under 21 can obtain dependent status. Under the EB-5, they can also be included in the residency application.
Should I buy the franchise before applying for the visa?
For the E-2, the investment must be made or committed when you apply. That is why it is key to coordinate the purchase with an immigration attorney from the start.
More frequently asked questions: data and rules
Short answers based on official sources. They are general information and do not replace advice on your specific case.
What does Item 19 of the FDD tell me?
According to the FTC, any claim a franchisor makes about sales, income or profits must appear in Item 19. Not every franchisor makes one; if a brand does, ask for the written support behind the numbers.
How big is franchising in the United States?
The IFA projects about 845,000 franchise establishments in 2026, nearly 8.9 million jobs and more than $920 billion in economic output. Those are sector figures, not results you should expect from a specific brand.
Can I use an SBA loan if I am not a U.S. citizen?
Since March 1, 2026, SBA 7(a) and 504 loans require owners to be U.S. citizens or nationals with their principal residence in the United States. Visa holders and green card holders do not qualify.
How long can I stay with an E-2 visa?
USCIS allows a maximum initial stay of two years. Extensions may be granted in increments of up to two years each, and there is no limit to the number of extensions while you keep qualifying.
What does the EB-5 visa require?
A minimum investment of $1,050,000, or $800,000 in a targeted employment area or infrastructure project, and the creation or preservation of 10 full-time jobs for qualified U.S. workers.
What is the L-1 visa?
It allows a company to transfer an employee who has worked for it abroad continuously for one of the previous three years to a related U.S. company. L-1A executives and managers can stay up to seven years in total.
What is the difference between a franchise broker and a franchisor?
The franchisor owns the brand and sells the franchise. A franchise broker helps you compare several brands and organize your research. The FTC advises verifying any information with current and former franchisees, not only with a broker.
Do I need to live in the United States to own a franchise?
Owning a business and being allowed to live and work in the country are different questions. Many franchisors expect owners to be involved in the operation, so the visa question should be resolved with an immigration attorney before you commit.
Do states have their own franchise laws?
Yes. Several states have franchise registration or disclosure laws in addition to the federal FTC Franchise Rule. Check the state-specific addenda that many franchisors include in the FDD, and ask your attorney which rules apply where you plan to operate.
Can I buy an existing franchise unit?
Many systems allow the transfer of existing units. Item 20 of the FDD shows how many transfers took place in recent years, and Item 17 summarizes the conditions for renewal, termination and transfer. Review the seller’s actual numbers with an accountant before you agree on a price.
How can I check the franchisor’s financial health?
Item 21 of the FDD contains the franchisor’s financial statements. Reviewing them with an accountant helps you understand whether the company has the resources to provide the training and support it promises to its franchisees over the term of the agreement.
What should I ask current franchisees?
The FTC suggests asking franchisees about their real experience with the system. Useful questions include how long it took them to open, whether the initial investment matched Item 7, how much working capital they needed before the business covered its costs, what training and support they received, and whether they would invest in the same brand again. Ask several owners, in different markets and with different years in the system, so you do not depend on a single opinion or on the experience of only one location. Take notes and compare the answers side by side.
Sources: FTC · IFA · SBA · USCIS, E-2 · USCIS, EB-5 · USCIS, L-1
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Official sources: FTC – A Consumer’s Guide to Buying a Franchise · USCIS – Options for Entrepreneurs