In any industry, you will find good, and not-so-good businesses and business associates. The same is true in the franchise consulting industry. Franchise consultants play an important role in the franchise industry. They can be a sturdy bridge between individuals seeking franchisees to invest in, and the franchisors who are seeking good franchisee candidates.
How a Franchise Consultant Works
The franchise consultant works basically as a recruiter for franchisors, finding candidates who match the skills and financial requirements of the franchise and referring them directly to a specific franchisor for consideration. While a potential franchise candidate isn’t required to work with a consultant, franchise consultants can help individuals sift through the thousands of franchise concepts to find just the right one for them.
Franchisor’s work with franchise consultants because they can uncover people in a certain market that a franchisor can’t find themselves. All of this matching is done at no cost to the candidates.
How Does a Franchise Consultant Get Paid Then?
If a referred candidate invests in the franchise after doing extensive research, the franchise consultant is paid a referral fee from the franchisor. This makes the services of a franchise consultant no cost to individuals who are looking for a franchise, which can be a win for everyone involved in the process.
However, this payment structure can also bring into question the ethics of a franchise consultant. Is the consultant working in the best interest of the individual, or are they doing the bidding of the franchisor?
As a franchise consultant myself, I believe I am an ethical person and look out for my clients. So do most franchise consultants.
So how do you really know?
Question Your Franchise Consultant – There are a couple of things to ask a franchise consultant before and during the research process.
First, if a franchise consultant is calling or e-mailing you before you start your search, find out where they are located. Are they in your market, or are they located across the country? Do they really know your area if they aren’t local? If a consultant from Miami is calling you in Los Angeles, it’s important to understand how they got your number (are you simply an internet lead), and why they think they are an expert in your marketplace.
There is a tremendous value and trust in being able to sit down in front of someone, eyeball to eyeball, especially when you are making an investment in something as large and important as a business. Like a Realtor, a franchise consultant located in your market will know about the neighborhoods, the other businesses in the area, the competition, the people and the community. I work locally with my clients, but not all franchise consultants do. It should be important to you, so be sure to ask the question.
Make Your Consultant Tell You Why
Once you engage with a consultant, they should have some sort of intake of information from you to outline what you are looking for in a business and what is important to you. Then, they should present you with several varied franchises to investigate. Now is a good time to ask them why they are showing those concepts to you. They should be able to explain which aspects of a franchise match your requirements. Have them articulate why a franchise is a good fit for you. This can help ensure they are truly matching the right franchise with you and your requirements, and not just pushing one of their favorites.
In the End, Does Your Consultant Care About Your Success?
Whichever franchise consultant you decide to work with should care about you and your business success, even though they can’t guarantee it. No one can guarantee your success, but you can surround yourself with supporters, and your franchise consultant should be one of them. Ask them what they do after you make your investment. Do they provide a good handoff between you and the franchisor? Will they check in, later on, to see how you are doing?
I can’t speak highly enough of the value of a franchise consultant in your own market. If you work with a local consultant, they should have a vested interest in your success after you invest in your franchise because, quite frankly, they might run into you at a networking event! They want your business to succeed because it supports their reputation in their region. Your franchise consultant may even ask to be involved to your grand opening event and could potentially be the best PR person for you in the beginning stages of your business.
And the icing on the cake? They may even become your customer!
Cindy Rayfield is a SCORE colleague and a serial entrepreneur. We are super fans of each other’s work and sit on a panel at the U.S. Air Force Academy each month to help transitioning service members interested in entrepreneurship understand their options.
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Related Book: Before You Leap is a wisdom-packed book that was written for the nascent entrepreneur. It uses stories and personal examples from the author to reveal uncommon things that can make or break your venture before it starts. The book not only gives the entrepreneur the tools for self-reflection but also exposes readers to options to building a full-blown business around their idea.
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