Franchise Consultants Helpful
They Can Help Franchisees Find the Right Business Opportunity
Aug 20, 2008
Franchise consultants can be enormously helpful in weeding through all that's out there to find the absolute best opportunity. Franchise consultants are typically paid by the franchisor when the deal has been signed, so there's no money required from you. These consultants also can generally help you find financing and other services, including accountants, lawyers and franchise real estate experts.
Why it is necessary for the franchisees
A competent franchise consultant can help in reducing the time and effort a franchisee spends exploring his or her options. No matter how thoroughly a potential franchisee investigates the market, the sheer volume can be overwhelming. Beyond that, the franchise community is relatively small, so a consultant may know many of the players personally, or by reputation. They can be invaluable in steering potential franchisees away from a company headed for trouble.
Franchise consultants also should be up on what the up-and-coming concepts are and ones that are just fads or are oversold. They can weigh market conditions to anticipate which companies may be spiraling down.
With all this information at their fingertips, they can help potential franchisees identify opportunities that meet with career goals and lifestyle plans, plus investment budgets.
How to find a consultant
There are few, if any, government restrictions on who can claim to be a franchise consultant. So merely searching the Internet for one may lead to those who are less than experts in their field. As with hiring any consultant, those exploring franchise ownership should ask plenty of questions: How many concepts has the franchise consultant placed in his career? How many franchise concepts does he or she currently represent? Do they have expertise in a certain area or franchise industry? Beyond concepts, what additional relationships/referrals can he or she provide?
With these questions answered, future entrepreneurs should look into who the franchise consultant is aligned with. Make sure that they work with a reputable company and aren't just out there on their own. Remember, anyone can hang out a shingle claiming to be a franchise consultant. But if they don't have relationships with hundreds of franchisors, they may not be presenting the breadth of the industry to their clients. Never pay upfront fees for them to assist with a franchise purchase as they are paid a finder's fee by the franchisor (just as a home seller typically pays the real estate agent.)
Wholesale franchise companies typically have consultants in their stable, and are able to offer a fairly wide perspective. Because they also may be working to develop small companies into franchisors, they may know about up-and-coming concepts. (Of course, watch to make sure that they're not merely pushing their new franchisors onto potential franchisees.)
In all, the right franchise consultant can help potential franchisees navigate all of the paperwork and research that has to be done to select the right franchise.
