Download this: relationship building and cultural fit can lead to a closing rate higher than 65 percent!
Discovery day is often looked at by brands as the attendance of franchise candidates serious enough to travel to the headquarters to meet with the executive team and highly contemplating joining the system. But how can brands make sure that discovery day is actually more like decision day? What are the necessary things to do leading up to discovery day and for the actual in-person presentation that can make the day finish with a grand slam franchise deal rather than a first base still considering the purchase run?
Pete Lindsey, the Vice President of Franchising at Sport Clips, has a closing rate from discovery day of 65 percent, denying about 22 percent of the people who come through. He comments that they’re able to sell effectively because of how selective they are. With 1,700 stores open and averaging two store closures a year for the past five years, he notes that validation is high. Due to the brand’s enormous growth and success, it allows the team to be optimized and to be able to turn people away.
“It’s the right way to do it because you get the benefit of bringing on the right team and finding harmonious folks that get along and don’t close stores,” said Lindsey. “It is refined and it’s gotten tougher over the years. We’re turning down different people today than we were six or seven years ago.”
So how is the discovery day structured for success?
Lindsey’s goal is for the candidates to see themselves and their families in the business. The candidates come in on a Sunday, and they’ll do some guided store tours to get an idea of the business. It culminates in a nice dinner so everyone can get to know everybody and give a preview into the next day. Lindsey says that the team wants all the prospects to get connected and break the ice that night so that they’ll be engaged and asking questions the next day. Monday morning, they begin the day with a meet and greet with key members of the corporate staff, including the executive team, training director, senior operations director, CEO and founder. The day’s program is interactive, and it really goes through everything that Sport Clips does in terms of support and what they expect from the franchise prospects.
“We discuss this is what we do, this is what we expect you to do, this is how we we do it, and this is what you get access to,” said Lindsey. “Our Item 19 noting our financial performance is pretty strong. It’s an absentee model and an investment play, but we find that doesn’t work really well, so the goal of discovery day, is I got to look you in the eye and believe you understand what it takes to run a successful store. This is it, do you get it, do you enjoy it, are you going to be passionate about it?”
Lindsey wants the candidates to see what owning a Sport Clips will be like and how it will impact their families. He comments that the team is pretty high energy, and it’s clear that the corporate team is passionate about the brand themselves. “It’s tangible, and we really give them a deep view into our culture,” he said.
Tim Arpin, Director of Franchise Development at Waxing the City has a similarly strong discovery day closing rate, around 75 percent. Although Waxing the City is a newer brand, its parent company Self Esteem Brands also owns Anytime Fitness – the largest fitness brand in the world. Waxing the City began franchising only in 2013, but there are currently 79 open locations with another 140 more under development. Territory growth is up around 300% this year, and Arpin commented that they’re hitting the magical number where things are popping for the brand.
Similar to Sport Clips, Waxing the City has a 24-hour discovery day. The candidates fly in and attend a cocktail hour to meet and greet the team and break the ice. The team times this at the same time as new franchisee training week to help candidates see that this is real and there are real people are opening locations. The next morning, they do a meet and greet with the CEO or president of the company and then they move into a discussion to talk through the business platform. They bring in the franchise business coaches and they walk them through how they support them from a coaching perspective and the tools that are provided to help them be successful. They bring in the marketing team and do a deep dive going over the marketing approach, and talking through the general ad fund and other support that would concern them. They then bring in the construction design director to talk about how the physical space is laid out, and what to think about as you’d begin moving into the construction process. They finish the office portion by going over the start up cost and ROI numbers before completing the day by visiting a studio and checking it out with “hands-on” time.
“Almost everybody who has come to discovery day has spent a fair amount of time in the vetting process,” said Arpin. “The financials are a refresher, and for most people, this is their final gut check. This is their opportunity to really see it, sniff it, and decide if this is something they want to get on board with.”
He agrees with Lindsey that you can’t overstate how important the cultural piece is and the opportunity to make the cultural perspective stand out in person.
“Discovery day is a confidence builder to move forward with you after having the in person contact,” Arpin said. “We get comfortable doing business over the phone and email that we can forget the importance of human contact. And we’re talking about people making the biggest financial decision of their life. We have to remember that this is the first time they’re going through this, and we need to treat them as such and put ourself in their shoes. We structure our approach by thinking what would I need to know, see and feel in order to be a part of this thing and feel comfortable moving forward.”
He notes that as the franchisor, it’s important to take a step back and really help facilitate the day to answer those questions that the prospects have and to help them understand exactly what they’ll need to know to run a successful operation.
“Our philosophy is to make it about them while you show them who you are,” said Arpin. “Discovery day is a great opportunity to really continue your vetting process of perspective franchisees while educating them on the cultural values of your organization. This is your opportunity, as well, to show them who you are. People will buy things from those they know, like and trust, and the same goes for franchising. Most of time, the prospect has made up their mind before they come. The corporate team needs to show them what the culture is all about and what makes up the heart of the mission of the franchise.”
He comments that there should never be a time when a perspective franchisee walks away from discovery day wondering what’s next. He said they should always understand when they leave what’s the immediate next step in the process for them individually. To ensure this, they connect with every single perspective franchisee one on one and say here’s what’s next whether that is to submit their financials, get an LOI out, or get the franchise agreement drafted. They have a go forward plan and move along the path, assuming the sale.
“The overall point of turning discovery day into decision day is really about getting the candidates good information before the day and in time for them to have a global understanding of what you’re doing,” said Arpin. “Discovery day turns into decision day when you put them over the top as a cultural fit, show them how this all makes sense, and help them put all the pieces together.”