Signing With A Franchise
You've done your research, you've assessed your own strengths and weaknesses, you've thoroughly evaluated the franchise companies that were a potential match for you, you've got your financing lined up, you've even jumped through a few hoops along the way, now comes the moment of decision. When it's time to commit and move forward with a franchise, you will be required to officially sign on. It's a big day and is often - but not always - marked by a Discovery Day held by the franchisor.
Discovery Days are often meant to serve as final meetings that are typically held at the franchisor's headquarters or other corporate facility. Often, the franchisor will cover some or all of the costs of the incoming franchisee. After all, at this point, you've both been in regular contact and things look pretty serious. These events are usually fun, informal, and characterized by high energy and positive words. It's a final chance to talk one-on-one and, if both sides are in agreement, sign on with the franchise. But keep in mind that you are not obligated to "come aboard" at this time, and the franchisor also reserves the right to not extend an invitation at the end of the day. As a matter of fact, you may even consider attending two or three different Discovery Days to help you make your final determination of a franchise concept. That being said, here are some things you should know and do to prepare for attending a Discovery Day signing.
- Most franchisors will pick up at least some of your tab.
- You should take your spouse - and most franchisors will want (or require) you to bring your spouse. This is a decision that affects them.
- Spend some time carefully and thoughtfully writing down a list of any question you still have or further explanations you'd like to get.
- You can expect to be joined by other franchisee prospects. Most agree that it's best to convene no more than a dozen or so total prospects at a Discovery Day. Otherwise, it becomes too difficult for prospects and corporate staff to spend enough time together one-on-one.
- Talk to the other prospects who are attending. This can be another great resource for you.
- This is your chance to meet corporate executives and probably a handful of existing franchisees face-to-face and get a real "feel" for the people and the company.
- Explore. Walk around the offices, talk to people, and ask questions. What does the "business climate" look like in the corporate office?
- It's a good idea to take notes. You may want to reflect back on these after you return home.
At the end of the Discovery Day you will most likely have a more complete feeling and understanding for the concept you are considering. And you'll undoubtedly feel a little tired, and perhaps over-stimulated. That's to be expected.
At this point, you may be asked by the franchisor to make a commitment. That's a decision only you can determine if you are ready to make. If you feel you have completed your due diligence and are ready to begin, by all means, ink the document. But if you want to sleep on it or just spend a little more time considering the offer, that's okay, too. Remember, if you're talking about your life savings, you want to make a rationale decision.
Next time, we'll examine just what to look for in the franchise agreement.
7.9: Getting Legal Advice
8.2: The Franchise Agreement