instead of asking user to type folder name into a dialog box, why not use the standard "choose folder" which provide usual file/folder selection graphic interface ? on top of that, it will also make sure the folder selected exists !
Also it is possible to user instruction "if My_Folder exists then ..." to check if folder (or file) exists
Example of direct user selection : 5 first lines are asking folder selection in folder Documents and detect user cancellation. Next lines are just example to display result
try
set SelectFolder to choose folder with prompt "choose folder" default location "/Users/My_User/Documents"
on error number -128
set SelectFolder to ""
end try
if SelectFolder is "" then
display alert "user did not select a folder"
else
display alert "User selection is " & SelectFolder
end if