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Expert Insight: How Long Does The Discovery Process Typically Take?

Industry veteran Paul Segreto explains the discovery process and lays out the typical timeline from when a prospect shows initial interest until Discovery Day.

The discovery process in the franchise space is a long and winding one, but for good reason. Weighing the prospect of a career change and a financial commitment of this magnitude shouldn’t be taken lightly, though it’s not just to the franchise prospect’s benefit to take their time.

Both the candidate and the franchise development team take this time to learn about one another—from shared values to short-and long-term goals and more—in order to determine whether the prospect-concept match is the right fit for both parties. The discovery process involves a significant amount of communication and learning on both sides before ultimately progressing to Discovery Day, an immersive experience that serves as the penultimate step in determining whether a candidate will move forward with a brand.

The discovery process varies to a certain degree depending on the specifics of a given brand, meaning there is no one-size-fits-all definition or process to it. Despite this variance, there are, however, a few things to be learned about how long it takes—and who better to learn from than an individual who has been in the franchise development and management industry for 30 years now?

1851 spoke with Paul Segreto, President and CEO of Franchise Foundry and Franchise Development Partner at The Toasted Yolk to lay out the typical timeframe a franchise candidate can expect to experience in the discovery process.

According to Segreto, experience is the driving factor in kickstarting the discovery process. “People visit a restaurant or retailer and have a great experience with the food, product, employees, atmosphere, et cetera, and pretty immediately take interest in the brand,” Segreto said. “Of course, they have to be looking at getting into a new business opportunity—but franchisors typically get an inquiry soon after the person visits a location.”

From there, interested parties will typically visit the brand’s franchise development website and fill out an inquiry, he added. After an inquiry is received, someone from the brand’s franchise development team will reach out to the candidate to set up a phone call.

“The first conversation to occur usually goes something like this: ‘How did you hear about the brand? What interests you about the brand? Why do you want to become a franchisee with this brand?’” Segreto explained. “The candidate usually speaks for about 20 to 25 minutes and then the franchise development lead goes into more details of the brand, from the history to the vision, growth plans, investment level and what they are looking for in a candidate.”

“Then, one of the most important questions of the call comes up and that is, ‘Can you see yourself doing this?’” he continued. “If the prospect’s answer is ‘yes’, they continue on through the pipeline and are then sent the franchise disclosure document (FDD).” 

Immediately after that, a second phone call is set up to go over the FDD and “dive into the meat and potatoes of the business,” Segreto said, noting that this typically occurs within a week of the candidate’s initial inquiry. During the second phone call—which typically lasts about an hour—the FDD is reviewed; questions, comments or concerns are addressed; and it’s decided whether the candidate moves along in the process. 

After the second phone call, candidates are usually introduced to the brand’s funding partner to iron out the monetary aspects and financial requirements of the business opportunity and a credit assessment takes place. Once the candidate’s credit is verified, the funding partner alerts the brand, and depending on the results, the candidate moves down the line. The credit assessment can happen in as little as a week, according to Segreto. 

Once the candidate is pre-qualified, the franchise development executives set up a phone call with the candidate to further discuss the vision. “Based on this call, the franchise development team and the candidate will make a verbal agreement for the candidate to attend the brand’s version of ‘Discovery Day’,” Segreto said. “This is usually about a two-week process, resulting in about four to five weeks after the initial inquiry.” 

A Discovery Day date is then decided on, and depending on how the in-person meeting plays out, the development team presents a franchise agreement for the candidate to sign, officially awarding them a franchise.

From start to finish, the timeline can really vary, Segreto said. 

“I’ve seen the entire process happen in 28 days—The Toasted Yolk closed three deals in 28 days in 2019,” he said. “But, most of the time, it takes a while longer—anywhere between three and six months, and sometimes even longer. It all depends on how ready the candidate is from the get-go.”

So, why is the discovery process so important?

“The whole point of the discovery process is so that the franchise development team can make sure the candidate understands and accepts the significance of buying into a franchise,” Segreto said. “We don’t want to waste our time or the candidate's time if this is something that won’t be viable for them.”