Can a Franchise Consultant Help You Find Your Dream Business?
By Jeff Elgin
If you have been doing some online research of franchise opportunities, you’ve probably run across the names of companies who offer to help you find the ideal franchise to purchase. These franchise brokers/consultants work much like a real estate agent. They find out what you are looking for and then they help you find it. Not all consultants provide equal service so be sure to choose yours carefully. Here’s what you can expect when you work with a franchise consultant company to help you find the right franchise business for you.
Most franchise consultant will tell you their service is free to the potential franchisee. The services provided by the consultant are paid for by the franchisor. The franchisor agrees to pay a fee for each qualified candidate it receives or for each candidate who becomes a franchisee, depending on the terms of the contract. Whether you work through a franchise consultant and apply to company X or go directly to company X, you should be paying the same franchise fee. If you have to pay more when you work through a consultant, the service is not free.
Getting to Know You
A franchise consultant will want to get to know you and to do so will have you fill out a short survey and probably have one or more conversations with you over the phone. They will ask about your previous business experiences and your goals for business ownership. To help you find the right business, they will ask about your family and your financial resources. The more time a franchise consultant spends getting to know you, the better job she can do in matching you to a company that will help you reach your goals. When you share your dreams for both the near future and for years down the road, you help the consultant understand you – and you also help clarify your dreams in your own mind.
There are several things to consider when evaluating the franchise consultant. First of all, how much time do they spend getting to know you? Are they listening to you or are they talking at you? Does the consultant provide a bio and do they have industry experience? A consultant may help you set a timeframe for making your decision but should not push you to make a choice. The process should feel like you are being guided, not sold.
There are many different franchise companies and many ways they may or may not be right for you. The benefit of working with a franchise consultant is that they can eliminate those that will not fit, saving you an enormous amount of time and energy. Using a model they have created for you based on what they’ve learned through the survey questions and consultations, the consultant will search their inventory of franchise companies to find those who fit your financial criteria, have available territory in your area, and are most likely to help you reach your financial and lifestyle goals.
Most franchise consultant groups work with a limited number of franchisors. They have signed contracts with each that spell out the obligations, mainly that the franchisor agrees to pay a fee for any of those leads that become franchisees. Having a high number of franchisors in their inventory is not as important as having a good selection, one that represents low, medium and high investment levels in a large variety of industries. The consultant group should have preformed a due diligence on each of these franchisors, carefully studying the company’s Franchise Disclosure Document and also talking to a large number of current franchisees to be sure they are happy with the franchisor – all before adding the franchisor to the inventory.
Additionally, the consultant should have personal knowledge of each franchise company they represent as well as its staff. Why? Because the better they know the franchisors, the more likely they are to choose those that will fit you. As a franchisee you will be your own boss but you will also be part of a larger company and, as in all companies, culture is important. The other franchisees will become your peer support group and the franchise operations staff will be there to support you from day one to as long as you choose to be a franchisee. A good match involves the intangibles (personality) as well as the tangibles.
After the initial consultation process has been concluded, the consultant will do her work and make an appointment with you to present those franchise companies that fit your model. Prepare to be surprised because these may be companies you’ve never heard of and may be in industries you’ve never considered. And that’s another advantage of working with a consultant – your options for finding that perfect business have been multiplied!
It’s important to mention here that consultant companies are sometimes criticized by a few people in the industry because a consultant, if she chooses, could pick the companies to introduce to a candidate not by the fit but by the amount of commission she will make. There’s no denying that this happens on occasion, however if a company doesn’t fit, the candidate won’t buy it and that consultant won’t make it in the business.
Resource and Guide
If you are working with a competent consultant, the process does not end when the franchise companies have been introduced. Your consultant should be both a resource and a guide as you perform your own due diligence on these companies. Have you run into problems with getting return calls? Let your consultant know. Do you have questions you can’t get answered or answers you don’t understand? Your consultant is there to help you. Can’t make up your mind between two great choices? Your consultant will bring you back to your initial interviews and remind you what goals you thought business ownership would help you achieve. A consultant who has “been there and done that” will be a great resource to you as you search for that ideal franchise opportunity so be sure to find a franchise consultant with industry experience.
It’s certainly possible to find a great franchise business without using a franchise consultant. However, if you could use help and guidance along the way and the service is free, then why not take advantage of the consultant’s experience?
Use these guidelines when choosing your franchise consultant:
- How long has the franchise consultant company been in business? There are many “flash in the pan” businesses but one that has been serving people for years will show that they have the “right stuff” to help their candidates.
- Does your consultant have industry experience? Franchising is a business model unlike any other and people who have owned their own franchise business and/or worked for a franchisor truly do have better insight into franchising.
- How many franchise companies does your consultant represent? Ideally, your consultant should represent enough different franchise concepts so that she has a good selection of industries and costs involved to offer you. However, a company need not represent hundreds and hundreds of companies. The better your consultant knows each of the companies she represents, the better job she will do matching you to those that fit your criteria.
- Do you like and trust your franchise consultant? You want to look for a consultant that can understand your needs and will listen to your concerns. If your consultant is pushing you in a particular direction or doesn’t seem to have the time for you, move on.
Jeff Elgin is the Founder and CEO of FranChoice, a national network of franchise consultants that provide free guidance and advice to qualified individuals in the United States searching for franchise opportunities that match their personal interests and financial qualifications.