Kim Daly, one of the top Franchise Consultants in the US, discusses the proper franchise research method.
Exploring franchise options is a 4-8 week due diligence process. Once you have selected 2-3 businesses that match your background, financial capabilities and lifestyle goals, you will engage in a series of calls with the franchisors. It is their job to educate you about their industry, company, culture, tools, systems and support. Once you have what I call the “book theory” for how the business operates, what role you will play and the basics of money in and money out, then you will be ready to validate how those tools and systems are working in the real world for the current franchisees. You should speak to 4-8 franchisees and work with an experienced franchise consultant to get advice on who to call, what to ask and how to know when you have all the information you need. Validation should help you funnel your options down to one, and this is when you need to read the FDD. An experienced franchise consultant will help you make sense of the FDD and lead you to a good franchise attorney if you feel you need one.
Once you have completed your validation calls then you should attend a discovery day. Discovery day is not a day for ah-ha moments. You won’t necessarily learn anything new, but you will get confirmation of all that you believed to be true and gain that confidence in your franchisor partner that a face to face meeting can bring. Ultimately, it is their business to award to you not your business to buy, so discovery day is the final step in the mutual evaluation process.
You should have your financing in order before discovery day so that if the franchisor approves you, you can sign and execute your franchise agreement within one week of your approval.
You will never be more excited about the opportunity then after discovery day, so use that momentum to help you overcome your fears and take the leap. The longer you sit and think about it, the more likely you are to paralyze yourself. It will never be easy to say yes, but if you have completed all of these steps, and your gut is telling you this could be good, make your decision and don’t look back.