DO I NEED A FRANCHISE CONSULTANT HELP FOR FINDING A FRANCHISE?
Franchise consultant is an individual who can help buyer find the franchise opportunity that fits to your situation. Finding a franchise opportunity that matches your skills, talents, goals, lifestyle, finances and earning expectations can be challenging. Fortunately, there are individuals with years of franchise knowledge and experience whose sole task is to help you navigate this difficult process – franchise consultants.
If you, like most prospective franchisees, are a first-time entrepreneur, you can gain much from the guidance and knowledge a franchise consultant brings to your search. The Internet, while helpful, contains a glut of information on franchising, leaving many great franchise opportunities unnoticed by prospective buyers. If a strong system and support structure is in place, and the franchise has a proven track record, you can be successful. Finding these less obvious opportunities is something a franchise consultant can help you achieve.
Why use a consultant?
While using a franchise consultant is a growing trend in amongst prospective franchisees, many individuals do not take advantage of these services; in fact, most people are simply unaware the service is even available. Among those who do, many feel they’ve already decided what concept is best suited for them. However, one of the primary advantages of a franchise consultant is his or her ability to direct you to franchises you might never have considered.
Technically, a franchise consultant is a broker who represents a franchisor or group of franchisors, just as a realtor acts as an agent for a homeowner or buyer. Originating more than 30 years ago in the U.S., the service is now offered amongst several broker networks. Many consultants have franchise industry experience or are former franchisees themselves. They have been down the road before and can offer insightful advice to help you avoid making the same mistakes they may have previously made as a business owner.
A common mistake made by franchise seekers is to focus on the product or service of the franchise instead of the business model and its characteristics. For example, you might think your neighborhood would be well served by a deli serving great panini sandwiches. While that may be true, it matters little if the investment is beyond your reach or you are not comfortable working the long hours often demanded of a food-service franchisee.
Personal likes and dislikes can also be misleading. For example, just because you like kids, it doesn’t mean a child-care franchise is the right choice for you. A good franchise consultant will look not only for the best or most lucrative opportunity available, but the one that best suits you and your experience.
Prospective franchisees typically say they want a franchise with a recognizable brand; we are attracted to the brands we know because we are familiar with their products or services. However, many of the most identifiable brands are full- or quick-service restaurant (FSR or QSR) franchises, many of which are beyond the financial reach of most people. In reality, there are thousands of reputable franchises available and most are not top of mind. This is an important factor to keep in mind when doing your research. A good consultant knows that a franchise system does not have to be a household name in order to fulfil your entrepreneurial dreams.
The first steps
When you first contact a franchise consultant, see if you are able to forge some type of connection with the person and determine if you want to develop a professional relationship with him or her. Do you think you can benefit from their insight and advice? Ask the consultant about his or her franchise experience and assess the matching process to determine if you want to work with the individual.
Once you’ve found a consultant you like, work with them and only them. Franchisors are typically represented by several consulting networks, so there is no real advantage to working with more than one individual; you won’t, for example, double the number of franchises available to you by working with two consultants. The vetting process of franchise networks varies; some networks strive to represent as many franchises as possible while others are more exclusive, choosing quality over quantity.
A common complaint about franchise consultants is that they only introduce franchisees to opportunities in their network. While this may be true, a benefit of working with a franchise consultant is the pre-screening of franchise opportunities, meaning you will be introduced to the best of the best. In addition, this does not prohibit you from looking at opportunities beyond the scope of their network. If you do want to research opportunities on your own, be candid with your consultant, to ensure you are not working at cross purposes.
Beginning the franchise search
As you start working with the franchise consultant, the first step is to provide information about your background and experience. This is often done via an online questionnaire. Don’t be surprised by financial questions, which will typically inquire about the value of your house, balance on your mortgage and other confidential data. The franchise consultant needs to have an understanding of your finances to make sure you are only introduced to franchises you can afford.
Next comes the consultation, which is the most important part of the information-gathering phase. A 60- to 90-minute discussion will allow you and the consultant explore your areas of interest and past work experience. If you have a spouse, encourage them to participate in this meeting, which can be held over the phone or face-to-face. This is a chance for them to learn more about your goals, and an opportunity for you to learn more about franchising and whether or not you have realistic expectations.
After the meeting, the franchise consultant will evaluate the information you’ve provided and research franchises opportunities from his or her network that best fit your goals and skill set. After checking for market availability, the consultant will typically introduce you to three to five franchise concepts. While it may be tempting to zero in on a particular franchise, it is important to investigate more than one. This approach will allow you to perform a compare-contrast analysis to find your best franchise match.
Narrowing your options
Your consultant will then coach you through the due diligence phase of the investigation, which typically takes three to four weeks, if not longer. By introducing you only to quality opportunities that match your lifestyle and goals, a consultant can save you a great deal of time. Investigating franchises takes a lot of effort; most franchise seekers run out of steam when the demands of life start to take priority over the due diligence required to make an informed decision. Using a consultant increases the likelihood you will stay focused and ultimately decide on the best opportunity.
During the due diligence phase, most of your contact will be with the franchisor’s franchise development representatives, whose purpose is to educate you about the details of the franchise opportunity to determine if there is a mutual interest. (Remember, this has to be a good fit for the franchisior, too.) During this period, your consultant will continue to serve as an advisor and coach, making sure you are learning about the concepts and making decisions that will ultimately lead you to the franchise that is the best match for you.
Once you have narrowed your search and completed your investigation it’s decision time. To many first time franchise owners this may be similar to jumping off the high dive for the first time. Your franchise consultant that has been with you through the process will provide encouragement so you can make that life-changing decision.