Generally the last step of your franchise research will involve attending the franchisor’s Discovery Day. Most often, the franchisor will bring you to their headquarters and you’ll have the opportunity to meet with the franchise team, to learn about their systems and support, and to see if you would be a good fit for their business.
If you’ve always thought of a franchise as something you “buy” rather than something that is “awarded,” you may be surprised at the thoroughness in which you’ll be investigated during the Discovery Day process. However, franchisors have some very good reasons for being selective about the people they let into their system and understanding their reasons will help you prepare for the Discovery Day process.
First of all, when you become a franchisee, you represent the business. Everything you do will reflect on both the corporation and also on the other franchisees. Because customers have learned that a product or service will be consistent from one unit of a franchise to the next, they will generalize that all units are bad if they have an unpleasant experience at one. Therefore, when deciding whether someone will be awarded a franchise, the franchisor must determine if the candidate has the ability and skills necessary to follow the system and to present the business in a professional and positive manner.
A good franchise company will not randomly award a bunch of franchises hoping that some of them will be successful. A business that closes tells the public that something about the concept isn’t working. Also, and of extreme importance to a franchisor, by law they must list all failed franchises in their Franchise Disclosure Document. A franchisor with a list of failed units will be less able to attract new franchisee candidates to the business.
Finally, in most cases the franchisor makes money on royalties based on a percentage of the franchisees’ revenue. Therefore, the more successful the franchisees, the more successful the franchisor.
Of course, it’s not all about them. The franchisor needs to convince you they know what they are doing and will be able to support and help you every step of the way. By the time you get to your Discovery Day, you’ll have done a good deal of investigation into the business and talked to a number of current franchisees. If you have any outstanding questions, this is the time to ask them. You’ll have the opportunity to meet with various teams so you’ll have a more in-depth understanding of each aspect of the business, from operations to marketing support. Your day will usually include casual time at meals to get to know the corporate staff as well as some structured presentations and meetings.
If everything falls nicely into place, you may want to sign a contract and hand over a check at the conclusion of the meeting. What you don’t want to happen is to be thinking, “Yes, yes, yes,” while the decision makers are looking at you saying, “No, no, no.”
Here are some suggestions to make the most of your Discovery Day meeting:
Dress to impress. Although you may consider this meeting as an opportunity for the franchisor to “sell” you on the attributes of their business, you are also there to sell yourself. Your attire should reflect this and you will want to look professional. In this day of business casual attire, you may not need to wear a suit and tie (or the female equivalent) to the interview but you will want to look polished. In other words, shorts and flip-flops are a no-no.
Be likable. A franchise is like a family and the franchisees of a system form a valuable peer group. A franchisor takes this into account when awarding franchises. Be personable, professional, enthusiastic and outgoing. Maintain eye contact when speaking and ask questions that show your interest. Be a good listener. Remember that not everyone is interested in every idea that pops into your head; however, everyone is interested in having you listen to their ideas.
Dale Carnegie, who wrote How to Win Friends and Influence People (which was first published back in 1936!), suggested using the following six methods to come across as likeable:
– Become genuinely interested in other people
– People like the sound of their own name
– Be a good listener
– Talk in terms of the other person’s interest
– Make the other person feel important and do it sincerely
·Have industry knowledge. One of the main advantages of franchising is that you don’t need direct industry experience because when you are awarded a franchise you most often will receive comprehensive training from the franchisor on running your business. Having industry knowledge, however, will show that you’ve done your homework and you understand the franchisor’s customer base and competition.
Show you can follow a system. Franchisors are NOT looking for someone who will reinvent the business. If you are trying to improve the concept you are not working on your own business. This is a red flag. Don’t tell the franchisor that you plan to deviate from their tried and proven system. Do tell them they you are impressed with how thoroughly they’ve documented each and every step and that you plan to follow the system to the letter.
If you can’t do this sincerely, franchising really isn’t for you. If you want to take risks, think outside the box, make up the rules as you go along and be a true entrepreneur, you won’t be happy as a franchisee.
Demonstrate your business savvy. Be prepared to discuss your past business experiences, particularly as they will relate to running your franchise. Some important areas to elaborate on include managing people, customer service, and sales and marketing. Success you’ve achieved in corporate America is a good indication of the results you can see as a franchisee. Franchisors will be particularly interested in both what you have achieved in life and your expectations for your new business.
Prove you are financially qualified. No good franchisor wants you to borrow so much money for a business that you’ll never be able to pay it back. Franchisors are focused on success – success of each franchisee and success of the system. They have resources to help them determine the amount of money a new franchisee needs to open and run their business until a break-even point. You will want to do your financial investigations prior to your franchisor meeting so that you can demonstrate how you will obtain financing.
Fit in. This is sort of like “be likable” but not exactly. You can be a nice person but still not fit in to a particular group. We’ve all said about someone, “He’s a nice guy but I don’t think he’d fit in with our company.” Because this is an intangible quality, I’ve put it last on the list but that doesn’t mean it is of less importance than the other items.
When interviewing you want your interviewer to feel you have the same values as she does and that your style and personality will mesh with those with whom you will work. You can often find out about the corporate culture from their sales literature, their web site or from phone conversations you’ve had with the office staff and the current franchisees. You might hear phrases like, “We’re a very family-oriented business,” or “Everyone here is into extreme sports. We’re going to hang glide on Saturday.”
By forming an opinion of the culture before your face-to-face meeting, you can decide if you will be comfortable in a long-term relationship with these people and also come up with ideas to show that you are someone they’d want on their team. As I always say, if you don’t like wearing chaps and spurs, don’t buy a Cowboy Clyde franchise.
Buying a franchise is not like buying a house or a car. The franchisor will closely evaluate you for personality, experience, compatibility, financial stability and business acumen. If you don’t measure up, they won’t risk their business on you. Also, it’s not uncommon in franchising to have two potential franchisees look at buying the same territory. After all the work you’ve done towards finding a franchise to invest in, don’t let the opportunity slip through your hands because of inadequate preparation for your Discover Day. With the right attitude and some basic research, you can make sure your Discovery Day meeting ends with a handshake and a “Welcome to the company!”