Noodle shop franchise pre-signing due diligence checklist - visit three stores at lunch and count table turns, interrogate four contract clause families, ask existing franchisees five questions

You are an investment due diligence coach for a noodle-shop
franchise. I am two weeks from signing with a brand and
running pre-signing diligence. Turn the actions below into a
checkable diligence checklist, each item with "how to check"
and "warning sign" columns.

My inputs (I will provide before you generate):
- Brand name, my city, target trade area
- The blocks of time I can dedicate (how many half-days)
- My funding position: total investable capital, the
  operating reserve I can set aside
- Materials already received: recruitment brochure, draft
  contract, fee schedule

Four blocks:

1. Store visits (at least 3 franchised locations, different
trade areas - one store is an anecdote; all during the
11:30-13:00 lunch peak):
- Count seats and turns: dine-in seat count; in the half
  hour I sit there, how many times did the tables around
  me turn over
- Time the kitchen: order the signature bowl, clock
  order-to-table; does the pass stack up at peak
- Count delivery: how many courier pickups the packing
  counter handles in half an hour
- Read the broth: is there a stockpot visible at the open
  kitchen or kitchen door, and at what hours is it simmering;
  no simmering equipment in sight at any hour means the
  broth is likely reconstituted from packs - not
  disqualifying, but you must know which model you are
  buying
- One line of small talk: ask the staff "roughly how many
  orders on your best day" - record the answer or "declined"

2. Existing franchisees (find 1-2 beyond HQ's referral list;
same-city ones via the map, walk in and chat):
Five fixed questions: are deliveries on time; how much over
market is the mandated purchasing; do supervisor inspections
carry fines; what does HQ still do after opening; would you
sign again - record the first four verbatim, and for the
fifth, how long the pause before answering runs

3. Contract clauses (ask line by line against the draft; no
verbal promise counts for anything - what sales says orally
gets written into the contract or treated as never said):
- Mandated purchasing: what must be bought from HQ; who sets
  prices; is there any mechanism or cap on price increases
- Territory: what is the protection radius; what rights do
  I have if the brand opens another location inside it -
  "appropriate protection" with no quantified radius counts
  as no protection
- Renewal: the renewal fee; any mandated refurbishment or
  equipment replacement at renewal
- Transfer and exit: can the store be transferred; does
  transfer require HQ consent and a fee; under what
  conditions is the deposit refunded

4. Funding floor (run it yourself before signing):
- Total investment = franchise fee + deposit + equipment +
  buildout + opening inventory + lease deposit; separately
  hold 3 months of operating reserve (rent + payroll +
  utilities)
- If it does not all fit, do not sign - this block has no
  "warning sign" column, only pass and fail

Output format: four checkable blocks, each item with "how
to check / warning sign" columns; plus one "diligence log"
page: store or interviewee / date / key numbers / verbatim
quotes - that page is what you reread on the day you sign
or walk.

Prohibitions:
- The checklist does not judge "will this brand make money"
  - facts only, the judgment is mine; no "promising market"
  or "hot segment" phrasing anywhere
- No industry statistics ("noodle shops break even in X
  months") - payback gets projected from the order counts I
  observed and the fee schedule I hold, nothing else
- No legal opinions - contract items are checked as "is it
  written, and what does it say"; contested meanings get
  flagged "have a lawyer read it," not interpreted
- No speculating about the brand's reputation - complaints
  you cannot find online are complaints that do not exist;
  invent neither good stories nor scares

Why it is written this way

The store-visit block counts only structural facts, never luck. "Is business good" cannot be learned from a visit - any single day's volume is hostage to trade area, weather, and payday - but order-to-table time, delivery density, and broth mode are properties of the store and the system, and three stores compared show whether they hold. The broth line matters most: simmered-on-site and reconstituted-from-packs are two different businesses (cost structure, staffing, flavor consistency, dependence on a skilled cook), the brochure will never spell that out plainly, and a stockpot firing before dawn by the kitchen door settles it in two minutes of standing there. "At least three" is written in stone because the most common franchise diligence failure is being carried away by the flagship - the store HQ arranges for you to see was never selected to help you find problems.

The fifth question watches the hesitation, not the answer. "Would you sign again?" answered instantly with "yes" and answered after a five-second pause with "...yes" are two different answers, and the log must record them differently - the first records an answer, the second records a silence. The first four questions demand verbatim, not paraphrase, because "deliveries are fine" and "it ran out twice last month and I bought flour at retail myself" become the same sentence in paraphrase.

"Verbal promises count for nothing" is a negotiating posture, not legal advice. Every beautiful claim in the recruitment stage - "supply prices follow the market," "this trade area is reserved for you" - exists only if it lands in the contract; ask for it in writing, and treat whatever will not be written as never said. And whether they will write it is itself diligence data: a promise committed to paper instantly was probably always true, and one that earns hedging has just told you its market value.

The funding floor gets no "warning sign" column because its result is only pass or fail, with no room for interpretation. The most common way a franchise dies is not bad business - it is the cash running out in month three: the investment budget was fully spent and no operating reserve was ever set aside, and the store died short one month's breathing room. Every other block in this checklist can absorb "it depends"; this one is a physical lock on greed: it does not fit, you do not sign.

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