Does a franchisor have to run a pilot operation before offering its franchise opportunity to the public?

There is no legal requirement on a franchisor to do this. Franchising is about granting rights to a proven business method. A franchisor must be in a position to prove to prospective franchisees that his business can work when third parties operate in accordance with its methods and know how.  The only way a franchisor can prove that the system works is by pointing to successful franchisees, but, in the early days, this won’t be possible and, accordingly, franchisors have to be able to point to their successful pilot operations.  In an ideal world, a franchisor would have two pilots who could either by employees or thirdparty franchisees who are prepared to take on the considerably bigger risk of operating as a pilot franchisee. In either case, it is essential that the franchisor selects as its pilot the same sort of people that will be likely to take up a franchise.  If any prospective franchisee is thinking of taking a franchise from a franchisor that has not had a successful pilot franchise operation, then they need to think again.