Why Validation Can Make or Break the Decision to Buy a Franchise

1851 Franchise Chief Development Strategist Sean Fitzgerald said it best: not all validation is good validation.

In franchise development, validation is arguably the most important piece of the discovery process for franchisees. It’s when they connect with the people who are currently in the same position they will be, and those opinions matter to them most of all. What franchisees, employees and other brand representatives have to say about a franchise truly does make or break many franchisees’ decisions to buy a franchise.

We talked to franchisees to learn how validation played a role in their decision-making processes. Here’s what they had to say.

David Weeks has been in the restaurant franchise business for over 15 years. The first brand he signed on with back in 2003 was Barberitos, a 50-unit fast-casual Mexican concept prevalent in the Southeastern U.S. In 2012, Weeks added Dunkin’ Donuts to his portfolio. Now, he currently operates five Barberitos locations and his seventh Dunkin’ Donuts opens at end of the first quarter this year.

When Weeks began looking for a new concept to bring to the Athens, Georgia area where his other units are located, the brand he ultimately chose was Newk’s Eatery. He is currently negotiating the real estate for his location, set to open in the third or fourth quarter of this year. The multi-unit, multi-brand franchisee’s experience with other brands helped Newk’s stand out for a number of reasons, but the validation he received from franchisees in the system made all the difference.

“I actually explored Newk’s Eatery’s franchise opportunity back in 2015 after an acquaintance told me he was interested in the concept and asked for my advice,” Weeks said. “I met the team back then, but we weren’t ready for a third brand. I told the development team the timing wasn't right, but to stay in touch every 6 months and they did.”

That regular contact included the various awards the brand had recently won and other impressive information, its persistence a large part of why the brand caught his eye about a year ago when he was looking to add to his portfolio. When the Newk’s team reached back out, “It was like cloudy skies opened up,” he said. Before signing on, though, Weeks spoke to several franchisees during the franchise purchasing process, a task he’s deemed essential for anyone interested in becoming a business owner via franchising.

“Franchisees tell you exactly what they think,” Weeks said. “Newk’s had a lot of other multi-concept operators in their system, so hearing those people have nothing but great things to say about the brand made a huge impact on my decision. Connecting with franchisees gives you the chance to validate the numbers in an FDD with what people on the ground are seeing. One of our bankers is actually a Newk’s franchisee himself, so that’s about the best validation you can get.”

Husband-and-wife franchisee duo Ravi and Parvinder Shahi of Juice it Up! shared a similar sentiment about the importance of validation. Their story began in 2005 when they were running an auto business. When Parvinder was in a car accident and couldn’t work, Ravi wasn’t able to run the business in his absence, causing the pair to realize they needed to explore other business ownership opportunities that allowed for both of them to be involved.

At the time, the Shahi’s oldest daughter was working at Juice it Up! before she left for college, and Ravi often went to the store to pick her up after her closing shift.

“The store owner was always there at that time, so we would talk,” Ravi said. “The more conversations we had, the more I decided this was what I wanted to do. It seemed like a happy place and a lot less stressful than our current business. We were introduced to the brand at the right time in our lives when we were trying to make a change.”

The Shahis both placed a lot of value on healthy living and making the right food choices, and the inside information from their daughter as an employee and her boss as a franchisee were the key pieces of validation they needed to pursue Juice it Up! further.

“[The franchisee] owned two locations, which gave us a positive image of the brand since he felt confident enough to open another unit,” Parvinder said. “Our daughter also gave us good insight into the customer base. When we got to meet the corporate team from the top down, even the CEO, we saw the brand had more of a family atmosphere than that of a big corporation. Everyone was very available and friendly. That face time really validated our decision.”

The Shahis had almost checked every bit of validation off of their checklist after hearing nothing but positive things from the franchisee, employee and corporate perspective. The deciding factor for Ravi and Parvinder, however, was the customer input they solicited from the patrons of their auto business, they said.

“The Juice it Up! brand has built a very good reputation in Southern California, especially in the Inland Empire,” Parvinder said. “It has more presence and we were constantly hearing customers talk about how much of a better and tastier product it was than the competition. That gave the final bit of validation we needed as far as going with Juice it Up! over another brand.”

The Shahis now own four Juice it Up! locations, in Corona, Riverside, Rancho Cucamonga and East Well, California, respectively. All four units are within six miles of their residence, a point of emphasis for them that they now impress upon others as they have become key brand validators themselves.