Discovery day

Definition

The franchisor's meeting where an incoming owner is vetted and approved.

Why It Matters

Buying an existing unit does not skip it. The brand is choosing an operator as much as you are choosing a brand, and its approval is a closing condition you cannot negotiate with the seller. What it actually tests is whether you clear the financial minimums the brand publishes, whether you intend to operate the store yourself, and whether you will sign the current agreement, not the one the seller signed. Get the meeting scheduled before diligence spending starts, because a no ends the deal after the money is spent.

In numbers: A brand publishing a $500,000 liquidity minimum applies it to you as the incoming owner, whatever the seller's balance sheet looks like.