I am a recent franchisee in Surrey who looked long and hard at a lot of franchises and business resales before plumping for one in the care sector a few months ago.
There are lots of things to worry about with any franchise. The franchisor, the product, the history of the franchise, the length of trading, the proof of income, the industry and its target market, and the current and upcoming competition. Also, if they are not a British Franchise Association member and don't plan to be, don't even talk to them. Cowboys avoid the BFA which was set up by the industry to try and apply some sort of voluntary code of ethics to the itself to encourage integrity and engender trust.
If somebody can't show you audited accounts proving their business's profitability for at least the last two years assume they are lying about any profits at all.
If they are most of the way through the current financial year, ask for management accounts for the whole period since the last audited accounts were published. Figures from twelve months ago are utterly meaningless in isolation. Looks for revenue trends, net profit, etc. Remove retained profit figures from any figures he gives you as they may relate to previous years and can make otherwise crap figures look good. Look for employees salaries appearing in low profit years and see if they appear in 'profitable' periods too. Look for disposal of assets boosting figures. One big salary dropping off the books can make anything look good for a while but it may also mean the good sales guy walked and new revenue isn't being generated and the business is only ticking over. Selling an office building looks great but it's the current owner's, not yours.
I'm at a loss as to what this franchise actually is. What's its product, how does it gets its members and are you talking about buying, the franchise in toto or just a franchise office? Are the members franchisees, or customers of a franchisee? Sorry to be a pain but there's not much info to go on from your description. Where's the growth? You can take it as read that you'll hear good headline figures from the guy.
I'm an ex-IT guy and there are lots of us in franchising. You are right to look around because you only live once but be analytical and clinical about opportunities in which you are interested and be prepared to be blunt. Learn to demand end of year financial statements and to undertstand them (apart from balance sheets which unless you understand exactly how double-entry works will make your head explode).
People rarely sell good profitable companies with a future and the £100-£150K bracket is full of nearly-there businesses that never grew or planned properly and simply ran out of cash with founders desperate to get something out of it before they hit the wall. Saw it time and again in my research because lots of people can raise that sort of cash from remortgaing and so forth. I also saw a lot of people who specialise in short-term get-rich-quick franchise sellling and not building profitable companies long-term.
Finally, if they sell services, find out that somebody or some market development is not about to make those services obsolete. Industry insiders will know about such threats but as an outsider you'll mostly be in the dark unless you do some serious research.
Cheers, John.