In most cases, you have to be invited to a Franchise Discovery Day. And, if you are invited to attend a discovery day, get ready. Things are about to get serious. You are about to enter an exciting step in your goal to become a franchise owner.
By the time franchise discovery day rolls around, you have pretty much decided which franchise opportunity you are going to focus all of your energy on. Once you’ve done that, you’re a lot closer to franchise ownership.
What is Franchise Discovery Day?
Franchise discovery day is a planned event at a franchisor’s headquarters, limited to “qualified” candidates for franchise ownership. Discovery day is the day that you as the prospective franchisee travel to the home office to meet the franchise team members in person and ask questions.
Franchise discovery day has a structured agenda including group presentations, meetings and a tour. Discovery day is an opportunity for the franchisor and franchisee to get to know each other. You get to meet key executives and solidify your impression.
Not just anybody can attend franchise discovery days. You must meet the franchisor’s desired qualifications in terms of skills and finances. Only candidates who have been through every stage of the franchise exploration process with the franchise representatives get an invite.
When Does a Prospective Franchisee Get Invited to Discovery Day?
Most franchisors don’t extend invitations to franchise discovery days until their candidates have gone through several specific steps in the process.
By the point of getting an invitation to franchise discovery day, you have done a good job with your franchise business selections. You’ve made sure that the opportunities you’ve looked into are easily within your budget, and you have identified the most profitable franchises. You’ve done a stellar job with your franchise research.
As a candidate for potential franchise ownership, you typically go through the following steps prior to franchise discovery days:
- Complete an application — Most franchisors ask prospective franchisees to formally apply. This includes providing confidential financial information (see why).
- Undergo a credit check — The franchisor checks the candidate’s credit history and usually performs a background check, too.
- Review the disclosure document — Before an invitation to attend, you will receive the Franchise Disclosure Document (FDD). Franchisors must present this document to franchise buyers before they legally can buy the franchise opportunity. The 23 items listed include company financials, executive backgrounds, and more.
- Begin review of the franchise agreement — Franchisors are required to attach to the disclosure document a sample of the franchise agreement. You have the opportunity to review rights and responsibilities in advance.
- Conduct due diligence — Before attending franchise discovery day you dig around for other information, including talking with and asking questions to franchisees. As part of your due diligence, you ask questions – lots of them. And remember you will be an entrepreneur. So you start to formulate a business plan based on what you learn.
Along the way, it’s the job of the franchisor representative to answer questions that prospective franchisees like you may have about the franchise system. The franchisor development representatives must feel confident that a prospect has a good understanding of the franchise business model and the requirements. Prospects are carefully vetted to ensure they are a good fit for the franchise program and know what their roles and responsibilities would be in the operation of it.
Only Serious Prospects Should Attend
If you meet the criteria identified above, and you do get an invitation to headquarters, should you go?
The answer to that question depends on how serious you are about becoming an owner of the franchise in question.
When my clients ask me if they should attend a franchise discovery day that they’ve been invited to, I tell them to only go if they’ve made the commitment to buy the franchise. That’s because by the time discovery day rolls around, the candidate has done his or her homework. You should know just about all there is to know about the opportunity. At this point you need no more research.
You will incur out-of-pocket travel expenses. You also have to invest some time. The event typically takes place over 1 to 2 days. Allow extra time as needed for travel depending on the distance.
You should have a franchise attorney standing by to look the contract over. In fact, the actual franchise agreement may be sent home with the candidate at franchise discovery day or a few days later.
That’s right: the actual contract. That’s why only serious franchise candidates should pay a visit to headquarters … candidates who are just about ready to take the leap.
What Happens at Discovery Day?
Franchise discovery days allow you to see the franchising operation in action. Each franchisor handles the day differently. Typically, here is what happens at franchise discovery day:
- Tours — Most franchisors include a tour of the franchise company offices. Some include a tour of a warehouse, if there is one.
- Group presentations — Expect formal presentations to immerse you into the brand system. Come prepared with a list of additional questions to ask franchisors so you can get answers.
- “Meet the team” opportunity — You’ll spend some time in different departments with support staff members you will be working with — including finance, operations, training, marketing and the sales team. You will meet the management team; this may include the CEO, founder and other personnel.
- Franchisee meetings — Some franchises bring in franchisees to talk with prospects.
- Visits to nearby operations — You may have an opportunity visit a nearby operation.
- Reception or dinner — In the evening there may be a reception of some kind if it’s a large event. Or it could mean going out to dinner.
Many franchisors hold multi-participant events with a number of people just like you who all are evaluating franchise opportunities. Or you may be the only potential franchisee attending the franchise discovery day.
What is the Result of Discovery Day?
When you attend the franchisor’s discovery day, you’re going to notice a difference in the way your franchise development representative is communicating with you. Things may start to feel a little more salesy than they have been during your past interactions. Remember, your rep is part of the franchise sales process. He or she could be feeling close to making a sale — and a commission.
But, two things need to happen before that sale can take place:
- The franchisor executive team needs to feel that you’d be a good franchisee, and if so, formally approve you. If they do so, your franchise representative will call you a day or two after your visit. The rep will tell you they would love to have you as a franchisee.
- The second decision will of course be yours — The Decision to become a franchisee.
Your discovery day will fly by. Absorb as much as you can. Get a feel for the company culture.
Then go back home and sit on things for a couple of days. Bring the contract to your franchise attorney. If everything looks good, you’ll have a decision to make. You’ll know what to do.