Discovery Process with the Franchisors
This is usually a 5-6 week process, but can be sped up if you want to move quicker through the process. Your main point of contact will be your franchise development representative.
Most franchisors follow a similar process.
Here’s what you’ll usually encounter.
Introductory Call
General overview of the brand, their history, what sets them apart. They’re also getting to know you at this point. Usually you won’t get into investment levels, pro formas or other serious financial info.
Unit Economics
Here’s where you start to get into the numbers. They’ll share startup and operating expenses, reported earnings, and they’ll send you their Franchise Disclosure Document (FDD) at the conclusion of the call. They’ll also invite you to Franchisee Validation and Leadership Calls at this point.
Franchise Disclosure Document Review & Q&A
FDD signed (you’re just signing for receipt of the FDD, not any kind of commitment), review of the items in the FDD, and they’ll answer your questions.
Validation and Leadership Calls
Validation calls are conversations with current franchisees in the system, and leadership calls are with leaders at the franchisor level. This is a crucially important step, because it allows you to validate everything you’re hearing from the franchise rep in your various calls with him or her and everything you read in the FDD. It also allows you to get a sense of the culture of the overall organization. Validation calls give you the clearest view of your likely level of success with the franchise.
Territory Mapping and Confirmation Day Invitation
This conversation happens after you’ve participated in Validation and Leadership Calls. You’ll cover territory analysis and finalize your territory. Most franchisors will lock in and hold your territory for you until you’ve attended and returned from Confirmation Day. You’ll receive a Confirmation Day invitation, and go over Confirmation Day agenda and your preparation for it.
Confirmation Day
A Confirmation day can happen either virtually or in-person. Most franchisors have them in-person. In-person is almost always best for you. You’ll meet and have social time with the franchisor team, view facilities, perhaps visit a franchise location. The franchisor uses this as a final interview of you before awarding you a franchise. Before you leave, you’ll schedule a decision day call.
Decision Day and Franchise Agreement Delivery
Here’s where you sign on the dotted line and transfer your franchise fee. You’re usually expected to make a decision on whether to sign or not within a week of Confirmation Day attendance. If you don’t make a decision, your territory will be opened back up and the franchisor will move on to other candidates.
Welcome Call
Celebrate with your new franchise team and discuss first steps to launching your business.
