How to Navigate a Discovery Day
The Discovery Day is an important component of your research as a potential franchise owner. This event is an opportunity for you to meet franchise representatives at the franchisor’s headquarters. The goal is to validate your interest in the brand and show you why should become a franchisee. Good franchisors will also use this event to ensure you are a good fit for the brand.
Preparing for Discovery Day
Before this meeting, you should create a list of remaining questions you want addressed or reaffirmed during your visit. As with all things in life, the more prepared you are for something, the more you will get out of it. At this point in the process, many of the most revealing questions you should ask will come from your reading of the brand’s Franchise Disclosure Document (FDD). For instance, if the franchisor has had a significant number of franchise failures or been involved in litigation, ask about it.
Questions to ask during Discovery Day
To assist in preparing you for a Discovery Day event, we have created a list of potential questions you should ask a potential franchisor. This is just a starting point, so do not think of it as a complete list:
- Tell me about your competitors, especially those operating in my local market. Based on your industry knowledge and market analysis, how will we strategically enter the market ready to compete?
- What is the biggest competitive threat in the marketplace? What is the biggest opportunity? (Note: Pay close attention here. If you do not get a substantive answer, either you are being sold or you are dealing with someone who simply does not know the answer. In either case, be wary.)
- Who is your customer at the end user level? What is happening to this market?
- What are you really selling? (For example, on one level, Little Caesars is selling pizza. However, what they are really selling is quality, service, and value delivered fast and conveniently.)
- What are you doing to secure the best prices on products? Are you also negotiating with service and equipment vendors (e.g., insurance, office equipment, etc.)?
- What are you trying to accomplish with your advertising?
- Are there any plans to sell the business in the next five years? If applicable, do the owners plan on eventually selling the company or passing it on to their heirs?
- Are any major changes to management planned?
- Where do you see the company five years from now? Are you planning any major strategic changes in the concept?
- How are you attempting to differentiate yourself in the franchise marketplace?
- What support do you provide to franchisees that helps them build revenues during their first six to 12 months of operation?
- What key performance indicators (KPIs) do you share with franchisees? In what way is the information shared?
- How does the franchisor respond to negative information shared by the franchisees? (Note: Be specific with the information that was shared with you and give the franchisor an opportunity to respond. Be wary of franchisors that do not give a substantive answer or speak overly negative of the franchisee that shared the information.)
- What has been the largest franchisee misstep faced? Why did it occur? What has been done to prevent a reoccurrence?
- What is the best thing you can say about each of your competitors? What are their strengths and weaknesses? (Note: Your best franchisors are humble enough to recognize the strengths of competitors.)
There is a lot that takes place during Discovery Day, from headquarter and location tours, to meeting the executive team, to personalized meetings discussing the brand and your interest and goals. Essentially, this is your best opportunity to make a positive impression on a brand you want to join and get the answers you need to feel comfortable moving forward. Those candidates who come prepared are more likely to have a favorable outcome from their visits than those who do not.
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