There are many critical factors to consider when researching a franchise to determine if it’s truly the right opportunity for you. However, few stages are as valuable as the step called Validation. During Validation it’s not only important to ask the right questions, but to know how to read between the lines, filter the responses and truly determine if a particular franchise is a model you can be successful and happy with choosing.
What is Validation?
Franchising validation is the process of conducting interviews with current and former franchisees to gather feedback on their experience with the franchisor’s systems, including their overall satisfaction, financial performance, and support received. It is a way to gauge whether the franchisor is meeting its commitments, providing adequate support, and offering a viable and successful opportunity.
Franchisees are legally required to receive a Franchise Disclosure Document (FDD) from their franchisor. This document contains information about the franchisor, the franchise system, and the franchise opportunity. It also includes contact information for current and former franchisees within the past three years. Many franchisors will also provide a “suggested validation list” of franchisees for you to contact. However, even if they do not provide such a list, we strongly encourage you to speak to as many franchisees as possible before making a decision to buy a franchise.
Keep in mind that the list of franchisees that the franchisor suggests may be biased towards satisfied, top-performing franchisees. Consider using the contact list in the Franchise Disclosure Document (FDD) to select additional franchisees to speak to that represent a variety of experiences, including:
- Top producers
- Struggling franchisees
- Franchisees who have owned their business for many years
- Franchisees who are fairly new to the system
This will give you a more balanced view of the franchise system and help you to make an informed decision. We have a comprehensive list of questions for you to ask here.
