FRANCHISE GUIDE
Franchise Validation Calls and Discovery Day: How to Prepare
Key takeaways
- Franchisors must give you the FDD at least 14 calendar days before you sign or pay anything.
- Franchisees can share what franchisors cannot, especially about financial performance beyond Item 19.
- Ask: “How do I fail at this business?” and “How long did it take you to break even?”
- Discovery Day is for confirming fit and spotting red flags, not for first-time research.
Where validation fits in the franchise process
- Introduction to the brand and initial screening
- FDD review (you must receive it at least 14 calendar days before signing or paying)
- Validation calls with current franchisees
- Financial projections for your finalist brand
- Discovery Day / Confirmation Day
- Verbal decision, attorney review and franchise signing
7 tips for franchise validation calls
- No franchise is perfect. Look for the key success factors and challenges, and how they fit your skills and capital.
- Take the franchisor’s list seriously. Top performers show you what is possible.
- Use group calls, which are common in younger brands, then ask for one-on-one time.
- Ask open-ended questions. Instead of “Are you happy?”, ask “How do you feel about where you are now compared with where you thought you would be?”
- Ask how people fail. “How do I fail at this business?” reveals the critical skill the system demands.
- Get break-even and working capital data. Franchises rarely fail because of the system. They fail because the owner runs out of working capital.
- Judge mutual fit and culture. The franchisor is evaluating you too.
Questions to ask franchisees
| Topic | Question |
|---|---|
| Satisfaction | Would you do it again? Are you considering expansion? |
| Economics | How long did it take to break even? How much working capital do you recommend? |
| Owner role | What does your week look like? What skill matters most? |
| Support | Is the support worth the fees you pay? |
| Risk | How do people fail in this system? |
Discovery Day checklist
Before: narrow your choice to one brand you are about 95% sure about, finish your projections, and send your questions ahead so the right people are in the room.
During: relax and absorb the culture. Confirm you can partner with the leadership team. Ask about the founder succession plan, especially in young brands. Be candid but professional, and be ready to commit to a decision date.
After: notice how you feel. Get back to the franchisor within 48 hours, resolve open questions quickly, and expect to give a verbal decision within a few days. Your attorney can then review the agreement.
Red flags
- Current franchisees are unhappy or would not do it again.
- The franchisor discourages you from talking to franchisees.
- Fees are significantly higher than comparable brands with no clear reason.
- High-pressure sales tactics, or leadership you would not want as a partner.
Frequently asked questions
What is franchise validation?
Franchise validation is the due diligence step where you talk with current franchisees to confirm what the franchisor has told you. It happens after you review the Franchise Disclosure Document and before Discovery Day.
What is Discovery Day in franchising?
Discovery Day, also called Confirmation Day, Decision Day or Meet the Team Day, is a visit with the franchisor’s leadership near the end of the process. It is a chance to confirm culture, vision and mutual fit before you decide.
Do you sign the franchise agreement at Discovery Day?
Usually not. You typically give a verbal decision within a few days afterward, then receive the signing documents and time for attorney review. Federal rules also require that you receive the FDD at least 14 calendar days before signing or paying.
What questions should I ask franchisees during validation?
Ask whether they would do it again, how long it took to break even, how much working capital they recommend, what their week looks like, whether the support is worth the fees, and how people fail in the system.
What is Item 19 in a Franchise Disclosure Document?
Item 19, Financial Performance Representations, is where a franchisor may share historical financial performance, such as revenue or profit data. Franchisors are not required to provide it, and the level of detail varies widely. That is one reason validation calls matter.
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