Getting the Most from a Visit to a Franchisor – Non-Scripted Due Diligence

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By Kay Ainsley, Managing Director, MSA Worldwide

At some point in your journey to become a franchisee, you’ll find yourself meeting with the franchisor and their staff at their headquarters. In fact, it should be a red flag if they try to get you to sign the Franchise Agreement before you complete such a visit.

Some systems hold their meetings, often called “Discovery Days,” with prospective franchisees towards the beginning of the sales process, while others first go through practically all the sales and approval steps and then meet the candidate at a “Decision Day.” Either way, as a prospective franchisee, this meeting is your opportunity to visit the franchisor’s headquarters and meet the staff that will be providing support to your business should you become a franchisee.

It is also the franchisor’s opportunity to meet those who will be carrying their brand to determine if there is a good fit.

Discovery Days and Decision Days

Franchisors go to great effort to make sure that Discovery Days and Decision Days are carefully planned and well executed. Staff is generally aware that there will be visitors to the office, desks are cleaned, floors vacuumed, boxes put away, coffee and donuts ordered, and a better than usual lunch brought in.

There is a lot of information to impart about the business, the franchisor, the staff, and the franchise opportunity. There is also a lot that the franchisor wants to learn about their prospect. Does the prospect love the concept? Will the prospect embrace the brand and faithfully execute the business to the operating and brand standards? Is the prospect entering the business for the right reasons, do they have realistic expectations for their business, and do they understand the big picture?

While there is a lot that each side will learn about the other from the more formal portions of the visit, prospects can gain a little additional input to help with their decision-making by peeking behind the curtain.

Look beyond the clean desks. Do the people who work at the franchisor’s headquarters have personal items such as family pictures or plants, or items that reflect the company’s culture on their desk or in their space?

Does the office look like a happy environment? Are people busy; do they look engrossed in what they are doing, or are they “watching the clock”? Just by observing the office environment and the staff, would you want to work there?

Next stop, hallways and restrooms. How do people treat each other when they pass in the hall or are in the restroom together? Does there seem to be a rapport between the people who work for the Company? Are they friendly toward others? Do they speak to you – or at least give you a smile as they pass? Do they walk with a purpose or show any signs of enthusiasm for being at work? Many of these people will be either directly or indirectly supporting you as you open and grow your business. Do you get the sense that they will do so willingly and go out of their way to be helpful?

If you happen to be there around 5:00 P.M., pay attention. Are people lined up and ready to bolt out the door at 4:55, or are they still engaged with their job and their co-workers at 5:05, 5:15 or even 5:30?

Those who like what they do and like being at work are generally more willing to be helpful to franchisees. You are also more likely to get an answer or a little help even if the person has to stay a little later to provide support to you.

Contacting Current and Former Franchisees

Before investing in any franchise, you should make sure to call both current and former franchisees. However, with today’s communications devices, a franchisee can often run their business without being in the location every minute, which can make it harder to make contact. But even if you don’t reach the franchisee directly, there are insights to be gained. Are the people who answer the phone well-trained; do people in different locations give the same greeting that identifies themselves and the company? Do they understand franchising and why you are calling? Are they helpful in providing information on how you can reach the franchisee or offering to pass along a message so that the franchisee can return your call? Do they seem enthusiastic and positive about the business?

Sometimes it’s not what people say about themselves, but how they act and what others say about them that is the most revealing. In conducting your due diligence on a franchise opportunity you will be well served to take a little peek behind the structured, scripted, and well-rehearsed information. It may give you a glimpse of what the company is really like – and what it might be like to be a franchisee in that system.

Do you have questions about franchising?

MSA Worldwide’s experts can help you determine if investing in franchising is right for you.

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