A: Validation is part of the research process when you, the prospective franchisee, interview franchisees in the franchise systems you are investigating. It is one of the most important parts of your research. And it’s one of the reasons I love the franchise industry: you hear facts directly from owners to help you gain a deep understanding of the business opportunity. It’s like trying the opportunity on for size.
Every franchisor is going to have their own franchise research process and the timing of validation may vary from one franchise to the next. Typically, validation spans the middle third of your research, beginning three to four weeks after you start your research.
Wouldn’t it be great if we could talk to owners right away? Actually, it wouldn’t. Webster’s Dictionary defines validation as: to support or corroborate on a sound or authoritative basis. So, by definition, we need some information first. Franchisors provide this as you progress through their research steps. Delaying validation until you have had sufficient learning about the business allows you to confirm if, from the perspective of an owner, the opportunity remains positive in your eyes.
Franchisors appreciate and respect their franchisees’ time and the fact that the owners are taking time out of their business to speak with you. Franchisors want you to have completed sufficient due diligence prior to validation to ensure that you have meaningful dialogue and maximize your learning, while requiring as little of the franchisee’s time as possible. That, and the franchisor owes it to their owners to vet candidates prior to validation.
How:
Until now, the franchisor has been driving the process. Now it’s your turn. You set the script for the one-on-one conversations with owners – aka the authority.
There is no set number of franchisees you need to speak with. Different folks have different needs and you can tailor your approach to fit. I recommend my clients aim to speak to between eight and 10 franchises as a minimum. If you felt ready to proceed with a franchise after speaking to three or four, I would encourage you to speak with more. If you talk to 10 owners, but still feel there are pieces of the puzzle missing, I would suggest you keep talking to more owners. How many is up to you. You’ll know when you’ve validated enough. (Typically, it’s because you keep hearing the same information again.)
By this point you will have learned a lot from the franchisor. Now it’s time to find out if it’s true – from the owner’s perspective. A lot of your questions will be aimed at flushing out the opinion on key areas, so, you might ask ones like “how would you rank the quality of the ongoing support from head office?” Think like a reporter – keep asking questions on the same theme to dig deeper. For example, if an owner ranks the quality of ongoing support as a six out of 10, ask questions to better understand. What’s missing that might otherwise score it a seven, eight, or 10?
The strategy is to speak with a wide range of owners experiencing different levels of success. This should include some top performers, some of the middle-of-the-road, or “happy camper” franchisees, along with some that are struggling or not very successful. You can also speak with some that have left the system too.
There are a lot of great resources that have lists of questions to ask franchisees. They’re long enough that you won’t get through the entire list with each franchisee you talk with. Prioritize your questions and re-evaluate as you progress.
You can tailor your calls to meet your criteria too. Perhaps you want to concentrate on specific owner situations. Examples could be demographics, prior backgrounds, length in operation, husband-wife teams, similar market sizes, or weather factors. The franchisor and franchisees can help you meet your specific needs.
Here are a few tips and suggestions to help you get the most from this important step in your research:
Factor your bandwidth
It takes a lot of time to validate. You’re going to go from one or two calls a week with a franchisor to suddenly trying to schedule and orchestrate more than eight calls in a short amount of time. Budget enough time so that you make the most from validation.
Clearance from the tower
Wait until you have permission from franchisors to begin validation. There is a reason why the franchisor times validation when they do. You might see trying to validate early as being keen, but the franchisor likely sees it as someone who can’t respect or follow their system. We don’t want that!
Manage your optics
It is important to be professional in your dealings with franchisees. Basics, like calling when you say you will, keeping to the agreed upon length of time, and being courteous and respectful matter! Smart franchisors circle back with their franchisees to get their opinions on the prospective franchisees they spoke with. It is better to have the owners providing positive feedback to head office.
Not all owners will validate
Franchisors cannot require their franchisees to participate in validation and some owners simply won’t. It could be fatigue from years of validating, or any number of other reasons. Some franchisees may also decline speaking about a particular area (for example: financial performance, income, financing).
Look for victim mentality
When you’re speaking to underperforming franchisees, look for who or what they blame for their lack of success. Is it everything under the sun (wrong logo, my market is different, their approach doesn’t work)? Or can they accept that they are at least partially responsible (I don’t work that hard, follow the systems, underinvest in marketing, staffing, picked a wrong location)?
While validation is only one of many steps in the research process, it can be the most productive phase. You stand to learn a great deal of information and insight straight from owners which helps you make a sound, safe decision.
Grant Bullington
Franchise Specialist
FranNet
gbullington@frannet.com