Franchise Discovery Day
When deciding whether or not to purchase a franchise, prospective franchisees will typically visit a franchisor’s corporate office, have meetings with the corporate team, and also visit one or more existing franchise units. This process is called “Discovery Day” because it gives prospective buyers an opportunity to learn about a company’s ownership, performance, and future for franchise ownership opportunities. Although the internet allows extensive research on franchises, serious franchise investors should physically visit and meet with franchise companies in order to make a well-informed decision. Meeting a company’s executive team is one of Discovery Day’s greatest benefits, giving potential buyers a true understanding of a company’s mission, values, and strategies for successful franchising.
When is Discovery Day?
After several discussions, a franchisor may invite a prospective franchisee to attend discovery day. A franchisor typically has a well-planned agenda, usually in a format including meetings with the corporate team and visits to the existing franchise and corporate-owned units. During this time, the franchise development representative will learn more about the franchisee, his or her background, and his or her wherewithal to operate a franchise. Franchisees should also take this time to conduct research about a company to ensure a good fit. Since a franchise agreement is a long-term engagement, typically 10 years, one should ensure knowledge and understanding of a franchise’s expectations and feel comfortable with its management team before engaging. Preparation is key. Prior to attending discovery day, one should write down any questions and make sure one has spent enough time with the franchisor and franchisee(s).
What questions should one ask at Discovery Day?
Discovery Day is a great time to ask questions, but franchisees should acquire as much information as possible from a franchise development representative before attending Discovery Day. Prior to attending a company’s Discovery Day, one should have a good understanding of the company, including reading its FDD. Here are some sample questions to ask to ensure one enters a beneficial partnership:
- Has the franchise terminated any franchisees? What were the circumstances?
- What are the long-term plans (for expansion or growth, especially if it is a brand with many locations)?
- How will the training be conducted?
- Does this system support and encourage multi-unit ownership?
- What is the construction and build-out process?
Discovery Day should heavily influence one’s choice of whether or not to become a franchisee with a company. If a franchisor’s answers satisfy a franchisee’s questions, one can consider joining the franchise with a clearer idea of what to expect.