Key Takeaways on Franchise Validation Calls - Talking to current franchisees via a validation call is the best due diligence available to you. Most buyers skip it or do it poorly. - Always call more owners than you first planned to call, ask open-ended questions, and listen closely to what’s not said. - If every answer is about the franchisor and none are about profit, keep digging. |
Why The Validation Call Matters
The online brochure is nice. The website is gorgeous. The development rep is charming, and the Discovery Day experience at headquarters was better than expected.
None of that tells you what it’s like to own the franchise.
What, or rather who, can? The people who can are the owners running it right now.
The existing franchisees know what the Franchise Disclosure Document (FDD) can’t show you.
For instance, they know how the first year really went and whether support shows up when the roof leaks, figuratively or literally.
Make Your Validation Calls Count
Fact: Item 20 of the FDD lists current franchisees and those who left. You don’t need permission to call them. Use that list.
Don’t stop at the references the franchisor hands you. Those owners are usually happy ones, which is nice for them and not as useful for you.
Note: I always tell my clients to use those recommendations for their first calls to practice and to get comfortable with the process.
I want you to call franchisees from the Item 20 list at random. If possible, call a few franchisees who left the system, too. They tend to be refreshingly honest.
Second, ask for a half-hour of their time and keep your word. Owners are busy. Respect their time and they’ll give you better answers. If you need a few more questions answered, you can always call them back if they agree to it.
Third, ask open-ended questions. A yes or no tells you very little. A story tells you plenty.
The Questions Worth Asking Current Owners
- “What do you wish you’d known before you signed?” This is my favorite. It invites honesty without asking anyone to trash their franchisor. Listen for the pause before the answer.
- “How long until you paid yourself a real salary?” I’m talking about a real paycheck you could live on. Many franchisees go longer than they planned to pay themselves, and you need to know how long.
- “Was the actual startup cost close to what the FDD estimated?” If the answer is “not even close,” ask what cost more and why.
- “How’s the support, honestly?” Ask for a specific example of a time they needed help. Vague praise is not an answer.
- “Would you buy this franchise again?” Simple and powerful. Notice how fast they answer. A hesitant “yes, but...” is worth a follow-up.
- “What does a typical week look like for you?” This shows you the real time commitment. Many first-timers underestimate it.
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How to Read Between the Lines
In my experience, here’s where the real skill comes in. Owners rarely say, “this is a bad business.” They tell you in other ways.
Listen for canned answers.
For example, if a franchisee sounds like they’re reading from the franchisor’s marketing deck, they might be. Ask an open-ended follow-up that requires a real example and see what happens.
Next, listen for praise that’s all about the franchisor. “The training was great. The team is wonderful. The brand is strong.” Lovely. Now ask about profit. If the conversation gets quiet, you’ve learned something.
Watch for hesitation on money questions. People who are making good money usually enjoy saying so. Dodging the topic is a signal.
Finally, watch for what they don’t mention. If nobody brings up the product, the customers, or the local market, ask. Sometimes the silence is the answer.
Fact: One call is an anecdote. Ten to fifteen calls are a pattern. Aim for at least a dozen calls, and more if possible.
Take Notes During Your Validation Calls and Compare
Write down every answer. Afterward, look for themes. If three owners mention slow support, that’s not bad luck. That’s the system.
Also compare what owners told you with what the sales team told you. Gaps between the two are exactly what due diligence exists to find. Bring any big discrepancies to your franchise attorney before you sign anything.
The Bottom Line
The validation call is the cheapest, fastest, most revealing step in the whole buying process. It costs you a few hours and could save you a thousands of dollars.
And remember, don’t just call the owners the franchisor wants you to call. Call the ones who will tell you the truth. Ask real questions, listen for the pauses, and trust the pattern over the pitch.
Because if you can’t get owners to talk to you openly, that tells you something too.
Best of luck on your validation calls!
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This post was written by The Franchise King®, Joel Libava. He is the author of two books on how to buy and how to research a franchise and advises people looking to make a smart decision on a franchise to own.