Those that are familiar with franchising know that a properly handled discovery day can lead to, in most instances, a higher close ratio. As a prospective franchisee, what can you do to be better prepared for a discovery day with your potential franchisor?
For most franchisees who are invited, a discovery day is a great way to get to know the franchisor and, in many cases, a first chance to meet the franchisor face to face. Discovery Days are also known as “Join the Team” days in some franchise systems as an attempt to make franchisee prospects who attend these events feel more at ease and ready to sign their franchise agreements. Overall, a discovery day is an opportunity for franchisors to show who they are and what their business is about to those elite prospects who are on the verge of signing up. It is also a way for franchisees to finalize their opinions as to whether they are willing to work with that “overall, a discovery day is an opportunity for franchisors to show who they are and what their particular franchisor and staff for the next ten to twenty years of their professional life.
When preparing for a discovery day, each franchisee prospect should have a list of topics and questions prepared for the franchisor. These topics and questions can include such things as asking the franchisor what is it about you that makes them think you would be a good fit for the franchise system as well as finalizing any negotiations that you have been performing to make sure that you understand what you need to do to be a franchisee.
Franchisors invest a lot of time and money into selecting the franchisees who will represent their business. After all, without franchisees, there is no franchise. It is important to know that franchisors are apt to only invite their top prospects to attend a discovery day. This may mean that you will attend alone or with multiple prospective buyers. Both methods can “being invited to a discovery day traditionally shows that the franchisor feels ready for you to become a part of their system.” prove very beneficial. If you are alone, you will be given undivided attention and will be treated considerably different than if you have to share your time with multiple other buyers. On the other hand, if you are with multiple potential franchisees, you have the benefit of hearing questions that other people have which you may not have considered previously. Being invited to a discovery day though traditionally shows that the franchisor feels ready for you to become a part of their system.
When you attend a discovery day, you should be prepared to sit through a brief introduction about the business, visit a local store to see the operations first hand, and possibly sit through an interview-type situation where the franchisor will ask you final questions to help them make their decisions as well. Take advantage of these opportunities to turn the table on the franchisor and interview them. Remember that you are making just as big of a decision as the franchisor is in signing the franchise agreement.
What about those franchisors who do not offer a discovery day? Does this make them a bad franchisor? The absence of a discovery day does not mean that the franchisor is bad or that they do not care about their franchisees. Some franchisors feel they do not need a discovery day to evaluate their potential franchisees or they do not have the facilities to properly host one. If the franchisor does not offer a discovery day it is in the best interest of the franchisee to request permission to visit with one or more franchisees to experience a day-in-the-life of a franchisee type situation. If this occurs, be prepared to sign a lengthy confidentiality agreement to protect the franchisor and all of the franchisees from you telling all of the information you learned to others or using it on your own. By doing this type of non conventional discovery day, you will learn the ins and outs of the business which can help make your decision easier.
There are many things that you will take away from a discovery day, such as an understanding of the business; additional information which may warrant the need for more time to make a thoughtful decision and speak with your spouse or other advisors; or, in some instances, the realization that this is not the business for you. No matter what your decision is after a discovery day, make it with confidence knowing that it was the best decision. Discovery days are beneficial to both the franchisor and the potential franchisee because it allows both to walk away confidently knowing that they made the best decisions for themselves, their families and their business.
Jason Power is a senior attorney with Shelton & Power franchise law firm.
Jason has been helping entrepreneurs review and negotiate franchise purchases since 2009 and is a regular speaker at the International Franchise Expo, West Coast Franchise Expo, Franchise Expo South and various other franchise expos where he gives tips on how to analyze and negotiate a franchise purchase.
For more information, visit the website: www.sheltonpower.com