Validation Calls

Validation Calls

Validation calls are a key component of the Discovery Process. Typically this comes in the middle of the process, after you’ve had a few more high-level calls learning about the brand. Oftentimes the FDD has been received and initially reviewed prior to these validation calls.

So What Is a Validation Call?

These refer to your opportunity to speak with existing owners of the franchise you are vetting. Owners are going to be the most transparent part of this process, as they will give you a firsthand look at their experience as owners.

In theory, these conversations should be validating everything you have heard up until this point.

How Many Should You Have?

We recommend focusing on three to four calls with owners.

Legally, you have the right to speak to every single owner listed in the FDD. Obviously, that’s a bit of overkill. If we can shoot for three to four calls, this will usually give us a good cross-section of owners to speak with, and get multiple answers to your questions.

If for some reason there are still some unanswered questions, our team at FranCoach can help you focus in on what exactly is missing, and then work with the franchisor to find an owner who can answer whatever we haven’t gotten addressed yet.

How Do Validation Calls Get Arranged?

There are a few ways in which this can happen. The most common is that the franchisor will do an email introduction between you and some of their owners. The franchisor then kind of steps out of the picture and lets you and the owners schedule these times.

“Are these the only five owners who are happy? Or their top five?”

Maybe this is true — but that’s very, very unlikely to be the case.

It is common for franchisors to personalize these introductions based on things like your background, personality, or location. They also want to give you a chance to talk to a more tenured owner as well as somebody who is newer.

As for the list being the top five revenue producers: never say never, but this is not something we’ve seen. In part that’s because in a lot of brands, the owners doing the most business don’t actually want to be on these validation calls. Why not? They’re busy being top producers, and would prefer not to do these calls.

Scheduled group calls

In some smaller franchise systems, we’ll often see scheduled calls rather than one-on-one calls with owners. Why does this happen — and what is the brand hiding?

Nothing, actually. If a franchise system has a smaller number of owners and the owners getting a ton of candidates reaching out to them all the time for validation calls, the owners are eventually going to revolt, as they’re spending all their time on validation calls rather than running their own business. But if the franchisor can go to those owners and ask, “Would you be willing to do a call, say, the first Tuesday of every month at four o’clock?” — that’s something most owners are going to be willing to do.

When there are scheduled group calls, can you still do one-on-one calls? Yes, if needed. The goal should always be getting those first three to four validation calls in. If at that point there’s still something you’ve not been able to get answered, our team will help make sure you can get this set up with the franchisor.

Before You Dial: Two Reminders

Be respectful of the owner’s time. They are graciously taking time out of their busy schedule running their business to have this conversation.

Don’t worry if you are not able to cover every question with every owner. This is why you’re going to talk to three or four different ones. One owner may be great talking about the financials and will spend half the call doing so. The next owner may not want to share anything on financials, but will provide great insight into marketing, or operations. Focus on three to four owners to speak with and you will more than likely get all of your questions answered.

The Four Questions to Cover

There are four main categories of questions we suggest clients cover.

1. The Owner Role

A sample of the day in the life of an owner. There is nothing more important in choosing the best franchise for you to own than this, so do your best to get each owner’s perspective.

2. Franchisor Support

Have the owners received support when they needed it, and who have they received it from? Obviously this support should come from multiple people within the franchise, but some systems also really encourage their owners to collaborate with one another. Yes, the support is key — but the way in which you receive it is most important.

3. Would They Do This All Over Again?

I always recommend asking this for two reasons. First, the owners are more than likely going to say yes, they would do it all over again — but they will tell you something they would do differently. And here’s the good info that is about to come your way.

What they would do differently is usually a portion of the plan the franchisor laid out for them that they either ignored or overlooked. This can actually become great validation for the plan the franchisor has put together.

Follow the plan, and good things are going to happen.

4. The Money

We do not ignore the money — but remember, the money follows the fit. There are key components of how to best understand the money, and those are covered in the section on the pro forma.