By Taking a Step-By-Step Approach to Discovery Day, Potential Franchise Owners Will Be Prepared to Make an Informed Decision Before Buying a Business
Investing in a franchise is a huge decision. A way to find out if a franchise is right for you is to attend a franchise discovery day. You may be wondering: What is a franchise discovery day? During the event, the franchisor and prospective franchise owners have the opportunity to vet each other. While you can learn a lot about a franchise opportunity through a simple internet search, franchise discovery day allows you to ask questions to a franchise’s executive team. While not everyone receives an invitation to attend franchise discovery day, being invited to the franchisor’s headquarters means that you are qualified and have a serious shot at franchise ownership with that brand.
While many franchises have also found a way to make franchise discovery day virtual, nothing can match meeting with franchise executives face-to-face to get a sense of what you’re getting with a particular franchise. Before being invited to a franchise discovery day, you will likely have gone through the following steps:
- You will need to complete an application. Most franchisors require you to fill out a formal application and to provide financial information.
- You should do your due diligence. Speak with other franchise owners to get an understanding of what to expect.
- The franchisor will look at your background. This includes running a background check and looking at your credit history.
- Review the franchise’s Franchise Disclosure Document (FDD). This document contains 23 items regarding the company’s financial statements, the background of its executives, and fees that you are required to pay.
- Begin to look at the Franchise Agreement. This will be attached to the FDD and give you a look at your rights and responsibilities as a franchise owner.
Now that you have done your due diligence and have gone through the steps the franchisor expects of you, you can now attend a franchise discovery day well-prepared.
What is the Purpose of a Franchise Discovery Day?
- It allows prospective franchisees to meet the franchisor face to face and learn more about the business.
- It allows franchisors to see the prospective franchisee’s commitment.
- Discovery day also allows the franchisor to get feedback from their management team about prospective franchisees.
- Franchisees have the opportunity to make a great first impression on franchisors.
What Happens at a Franchise Discovery Day?
- Franchisors can give prospects a tour if they have physical locations.
- Team members are interviewed, which allows both sides to have the opportunity to ask and answer questions.
- PowerPoint presentations that outline the concept, market, support provided, and other aspects, are shown.
Questions to Ask at a Franchise Discovery Day
- Has the franchise terminated any franchisees? If so, what were the circumstances? What events can lead to termination?
- What are the long-term plans for the business? Are you considering expansion?
- How will the training be conducted, and for how long?
- Does this system support and encourage multi-unit ownership? Or do you only like to work with single-unit owners?
- What are the construction and build-out process?
Simply researching a company online to find out how it works doesn’t do it justice. Discovery day is an added layer of due diligence to know the management team and make the right decision when investing in a franchise.
Now that you know What is a Franchise Discovery Day? It would benefit you to work with a franchise consultant to help you through this process and let you know if you are attending franchise discovery day too early, which is a common mistake prospective franchise owners can make.
What Does a Franchise Consultant Do?
By definition, a franchise consultant connects entrepreneurs who want to own a franchise with franchisors, who sell them. As a prospective franchise owner, a franchise consultant looks at your skills, background, and financial situation to find the perfect franchising opportunities for you. This professional also works with franchisors to let you know if you are the ideal franchise owner they are looking for. You should leave the franchise discovery day feeling empowered that you have all the information you need to know before making an investment in a franchise business. But what happens when discovery day is over? Emotions are high after discovery day because you may be inspired and can’t wait to be a franchise owner with your dream brand. But it would be a mistake to buy a franchise right after the event is over.
Take some time to rest and look over the notes you took. Another important thing to do before owning a franchise is the franchisee validation process. You have the great opportunity to speak with current franchisees and get the remaining information you need before potentially owning a franchise. To make the most of franchisee validation, ask a few questions that are specific. Pay attention to what they say and you’ll get a better sense of what a franchise business is really like.