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Key Takeaways Questions like “How do I fail at this business?” and “How long did it take you to break even?” can reveal risks that may not be obvious from the FDD.u003cbru003e
Even if a franchise performs well nationally, you still need to research your specific area, competition, customers and costs before deciding.
Perhaps one of the most overlooked and most important parts of the franchise discovery process is validation. It’s time-consuming, detail-oriented, un-sexy work, but it’s one of the most valuable parts in ensuring that you’ve chosen the brand that offers the best mutual fit.
As a franchise consultant who has worked with over 1,000 franchise candidates, I’ve noticed that there is often a certain resistance some feel towards starting validation. Despite my encouragement, I still have many candidates who avoid or dislike validation calls. And I get it – it can be time-consuming, sometimes frustrating and feel intrusive. But, at the end of the day, I always emphasize that it is the most important part of any prospective candidate’s due diligence.
So, what is validation?
In the broad scope of the franchise discovery process, “validation” comes after you have been introduced to the brand, after you’ve been through initial screening, and have also been sent and reviewed the FDD (Franchise Disclosure Document), but before you’ve attended Discovery Day or signed a Franchise Agreement. This is the middle of the process where theoretical conversations slide into clear focus before decisions start being made.
They’re called “validation” calls for a reason. These are calls you make with franchise owners in the brand you’re considering, validating and confirming information the franchisor should have already shared with you.
Financial scope before validation calls
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