This episode is the second in a two-part series all about buying a franchise! In the first episode, we covered everything from how to start the process, to understanding the financial model and being able to intelligently converse with franchisees. Listen to this episode, with Lance Freeman, as we continue our discussion covering validation, ‘Discovery Day’, making a decision, and buying a franchise.
Validation is where the rubber meets the road—you’ve been conversing with franchisees and have a good concept of the brand and the business. You’ve hopefully met many of the people you could be working with. At this point, you should have a good idea of whether or not you want to move forward to the next step, which is called Discovery Day.
It’s typically a 1-2 day event where you meet with the executive team and CEO. Sometimes your spouse is invited to join. They want to get a good feel for who you are and if you have the mind for the business. A good representative or franchise consultant will only present you as a good fit for the company if they believe you are. If you make it to this part of the process, it’s time to take things seriously.
You would be surprised how many people come into Discovery Day wholly unprepared and unprofessional. From hitting on team members to getting wasted, Lance has seen it all. Many people dig themselves a hole by being combative and argumentative. If you’re a professional and serious about the opportunity you’re being given, this is not the time to act like you’re at a college frat party.
Also remember, this process is a two-way street.
A candidate can do really well over phone calls and email communication but completely fall apart at the seams in-person. So what can you do to not be one of these people? Keep your anxiety and nervousness in check. Come prepared with solid questions, a willingness to learn, and show genuine interest in the company and people. This isn’t the time to play it cool and hide your interest. They want to feel you want to be there!
Though it may sound like I’m pushing a sale, I’ve started warning clients if they will have competition at Discovery Day. Sometimes, there are multiple candidates who would be a great fit for the franchise vying for the same territory. It’s better to know going in then be blind-sided when you see one or multiple other people show up. The hardest part is that an existing franchisee may swoop in and buy up the territory you were interested in. Unfortunately, when this happens, a franchisor is more likely to trust and go with their current successful franchisee.
So if you’re up against stiff competition, what can you do to set yourself apart? You can come prepared with existing funding, showing that you’re pre-approved for a loan. Ask relevant questions that show a depth of knowledge about the industry and their franchise. Be respectful, be positive, and do not be negative or combative. Listen to the rest of the episode as we talk about how to land your perfect franchise deal and what you can do if an opportunity slips through your fingers.
So now Discovery Day is over and it went well. No one was competing for your territory, and the franchise let you know they’d love to have you on board. At this point in the process, you should have learned as much as possible and now feel comfortable with the business. You’re nervous, excited, and 99% sure you’re ready to move forward. So what is your next step? What should you expect?
One recommendation is to do a legal review. Sit down with a franchise lawyer (not a bankruptcy or criminal lawyer) and review the franchise agreement/contract—make sure you understand what it’s saying and that there is no concerning phrasing to be questioned. If everything checks out and you’ve taken a couple of days to make sure this is the deal for you, accept the offer and buy your first franchise! Join us for the rest of the episode as we talk about cold feet, who has more to lose, and parting words of wisdom.