Franchise Discovery Day: Who Should Pay The Costs?

A common question asked by prospective franchisees is who
should pay the cost of attending the Franchise Discovery Day?  Should the prospective franchisee pay for
their own costs or should the franchisor cover the prospective franchisees
costs?

In the world of franchising, there is no norm.  Each franchisor is different in regard to who
is responsible to pay for transport, lodging and food.  Generally payment policies fall into one of four
buckets:

1. Some franchisors pay for everything.  They tend to believe the following ” ‘the
   more people we can bring in for our Discovery Day, the more new franchisees we
   will attract.  Even if the person is not really
   committed, we want them in for Discovery Day because if they come, they may
   change their mind.’  Although there are
   certainly exceptions, often these companies have a lower initial investment and
   tend to attract individuals who are in an employee mentality.
2. One the other hand, some franchisors don’t pay
   for anything.  They tend to believe the
   following ” ‘We are only interested in meeting with serious people who are
   willing to invest in their future. 
   Investing a few hundred dollars to attend a franchise Discovery Day is
   the first test.  If they are not willing
   to do this, then they are not really players and we don’t want to dedicate an
   entire day of staff time focused on them.’ 
   Again, there are exceptions to this rule but often these franchisors tend
   to deal with a more sophisticated investor/business owner.  These experienced, self reliant individuals
   do not expect their expenses to be reimbursed.
3. The third type is the franchisor who splits the
   middle.  They require the franchisee pay
   something ” such as the airline ticket -but they also cover part of the
   expense, such as the hotel and/or airport transport and/or food.  This approach achieves both objectives. It allows
   the individual to invest in their self and show seriousness but it also
   demonstrates to the prospective franchisee that the franchisor is excited to
   meet them.
4. Finally, some franchisors offer to reimburse some
   or all expenses if you become a franchisee. 
   Similar to the item above, this approach requires that the prospective
   franchisee have a high degree of seriousness in the process while also sending
   the message that the franchisor is willing to extend a courtesy.

Often the discussion of who should pay for Discovery Day is
broken down into an interpretation of roles.

If it is a recruiting or sales relationship where the
franchisor is the vendor (seller) and the franchisee is the consumer (buyer),
then it stands to reason that the seller should do whatever they can to ‘make
the sale’.  It would be similar to selling
a time share where vendors give away vacations if you attend the sales meeting
or a company who is trying to recruit you to work for them.

On the other hand, if granting a franchise is a more
equitable selection process where both parties need to feel comfortable
entering into a relationship, then it would stand to reason that each party
would pay for their own expenses related to a business meeting where a
potential long term relationship is being discussed. 

Underlying this discussion is one of personal responsibility
and entitlement.  Moving from an employee
mentality to a business owner mentality requires a decision to take control of
your future and to be responsible for your decisions.

When a franchisor pays for all the expenses, it fits with
the former employee’s feeling of entitlement that ‘expenses’ should be
‘reimbursed’.  However, reimbursing these
expenses does not help a person evolve in regard to their understanding of what
it means to be a business owner.

As a business owner, you are not entitled to have your ‘expenses’
reimbursed.  Business owners make
investments because they believe the investment has the potential for a
positive outcome.  Seasoned business
owners know this and they expect to pay for their own expenses.  If you are transitioning from an employee
role to an ownership role, it is good to understand this prior to investing in
a franchised business.

The real answer regarding the cost to attend a franchise
Discovery Day lies within you.  What role
are you prepared to embrace? If you want to be a business owner, forget
entitlement and take ownership of the process. 
If you cannot overcome the feeling that you are somehow entitled to have
your expenses reimbursed, maybe you should reconsider whether business
ownership is for you.

About the author: