Are you considering investing in a franchise, but feeling overwhelmed by the vast array of options available?
Perhaps you’re a seasoned business owner looking to expand your empire, or maybe you’re a first-time entrepreneur dipping your toe into the waters of franchising. Whatever your situation, navigating the world of franchising can be a daunting task, which is why a franchise consultant can be an invaluable asset.
In this article, we’ll discover more about franchise consultants, from what they do to when you should reach them.
Whether you’re looking for guidance on franchise selection, help with franchise financing, or simply need a sounding board for your ideas and concerns, a franchise consultant can offer the expertise and support you need to succeed in the world of franchising.
So let’s dive into how a franchise consultant can help you achieve your business goals and make your entrepreneurial dreams a reality.
So What is a Franchise Consultant?
A franchise consultant is a professional who provides guidance and support to individuals or companies interested in owning and operating a franchise business. They are typically experts in the franchising industry and have extensive knowledge of the various franchise opportunities available, as well as the operational aspects of owning a franchise.
The primary role of a franchise consultant is to help potential franchisees navigate the complex process of selecting and investing in a franchise. They have in-depth knowledge of various franchise opportunities and can provide insights into the strengths, weaknesses, and profitability potential of different franchises.
6 Things About Franchise Consultant
There are six things you should know about them, these are:
- What does a franchise consultant do?
- Is a consultant the same as a franchise broker?
- How do they get paid?
- How much do franchise consultants make?
- Why is their role important?
- When to reach out to a franchise consultant?
1. What Does a Franchise Consultant Do?
A franchise consultant is the backbone of a successful franchise model. They have perfected the art of taking an established business and making it even better.
Whether it’s finding avenues of growth or formulating strategies to modernize operations, a franchise consultant can offer you the following services:
Franchise Research
They help clients identify suitable franchise opportunities based on their budget, interests, skills, and market analysis. They conduct thorough research on different franchise models, industries, and market trends to provide informed recommendations.
Franchise Evaluation
Consultants assess the viability and profitability of a franchise opportunity by analyzing factors such as the franchise’s track record, financial stability, market demand, competition, and support systems. They may review the franchise disclosure documents (FDD) and assist clients in understanding the terms and obligations involved.
Financing Options
A franchise consultant provides guidance on financing options, helping clients explore different funding sources such as loans, grants, or self-funding. They may have relationships with lenders or financial institutions that specialize in franchise financing.
Franchise Negotiation
Consultants can assist in negotiating the terms of the franchise agreement, including initial franchise fees, ongoing royalties, marketing fees, territory rights, and other contractual obligations. They help clients understand the legal implications of the agreement and ensure fair terms.
Overall, a franchise consultant acts as a trusted advisor throughout the franchise selection and investment process, aiming to minimize risks and increase the chances of success for their clients.
Furthermore, franchise consultants are dedicated to helping current and prospective entrepreneurs answer two major questions:
- Am I ready to become a franchise owner?
- Which one is the best franchise for me to be successful and happy?
More than their expertise in the field, a franchise business consultant should be someone you feel comfortable with to guide you through the process and beyond.
2. Are Franchise Consultants and Brokers the Same?
A lot of people may consider a franchise consultant similar to a real estate agent or broker. However, the consultant is a lot more than just a deal closer.
Franchise Consultants…
Keep up to date with the latest in the franchise industry, ensuring they are continuously building on their network and knowledge.
A successful franchise business consultant is one that can bring a wealth of resources to their clients. They can help them evaluate their own skills as entrepreneurs. Additionally, they have the right network to connect them to franchisors that could be a good fit.
What’s more, the best franchise consultant will also guide their clients through the franchise ownership process. Once complete, they will maintain their relationship with franchisees even after they have started the franchise.
A Franchise Broker,
Acting as a liaison between franchisees and franchisors, middlemen assist prospective franchise buyers. This includes helping them find an appropriate franchise opportunity, negotiate the terms of the agreement with their chosen franchisor, and make payments on the purchase.
However, unlike a franchise consultant who will extend support throughout the process by expanding their portfolio in line with industry developments -middlemen usually do not follow up or assist after closing the deal.
In a nutshell, a franchise broker bridges the gap between a brand and its potential buyer, while consultants provide expert guidance.
3. How Do They Get Paid?
Prospective franchisees tend to get franchise consulting services for free. This is because the franchise consultant earns their income from the franchisor.
This is very similar to how a lot of recruitment agencies around the world work.
A franchise consultant is paid only after a client successfully owned a franchise…
it is to their benefit to equip their clients as best as possible. This means they will provide ideas, training, and advice on how they can best approach the franchisor.
It is also in their best interest to ensure that the franchisee is happy. This can only happen if they have been matched with the franchise opportunity best suited to their own interests and strengths.
If a new business owner is happy, then they will inevitably refer others to their franchise consultant in the future.
Once a franchise deal has been closed…
the franchise consultant will either be paid in the form of a commission or a share of the franchise fees. This is part of the fee paid by the franchisee to the brand. There is an important sign to look out for to confirm a good franchise consultant.
This is their willingness to share the Franchise Disclosure Document (FDD) with the potential franchisee, prior to any deposit being made.
If your franchise consultant is not open to sharing the FDD with you, it should raise some questions. This is a red flag for both the franchise consultant and the company they are trying to bring new franchisees into.
4. How Much Does A Franchise Consultant Make?
A franchise business consultant can earn anything from $10,000 to $20,000 in commissions for completed franchise sales.
Most franchise consultants have a large portfolio of franchise companies and so their earnings will vary between each company agreement.
For example, a franchise such as Dunkin’ Donuts will most likely pay a franchise consultant more than a smaller business.
This is because they are well known and have locations all over the U.S. A small business that has not been franchising for a long time will not be able to pay as much.
On the other hand, some franchise consultants have agreements with franchisees directly. They might agree to be paid a percentage of the initial franchise fee.
This is typically 40-50% of the franchise fee. Similarly to the commission, the actual amount the franchise consultant gets paid will depend on the fee the franchise charges for new franchise owners.
Naturally, with franchise opportunities with bigger companies such as Pizza Hut, the initial investment is high. They will, therefore, also pay franchise consultants more for their service.
Having said that, each consultant has their own agreements with the franchises. It is therefore up to their negotiating skills to earn them a higher share of the franchise fee or commission.
The more experienced a franchise consultant is, the more likely they are to have a strong relationship with businesses and hence, more valuable agreements.
5. Why Their Role Is Important?
With the rapid growth of the franchise industry, franchise growth has been exponential.
Increasing numbers of smaller brands are now entering the industry together with leading franchise brands. This has also meant that at the franchisors’ corporate headquarters focus has shifted.
The focus is on the successful operations of the franchises and the strengthening of their company and brand.
Franchisors have fewer resources to allocate to expanding the franchise family through outreach. This is how franchise consultants and franchise brokers have evolved to act as the franchisors’ salesforce. This is why their role is so important:
Consultants attract potential franchisees
This is where the phrase ‘Quality over Quantity’ comes in. Franchise Consultants do not just look for potential franchisees. They look for the best potential franchisees.
If a franchise consultant keeps bringing in bad fits for the franchisor, they are likely to lose them as a client. Bring in excellent candidates though and the relationship only strengthens.
For this reason, a franchise consultant will dedicate many hours to getting to know the franchisees. They will make the effort to get to know their interests and dedication to a new franchise.
For a busy, multi-national franchise, this is invaluable expertise and service that would otherwise require a lot of their resources.
They sell franchises
Since the franchise industry has expanded, franchise consultants have become the sales force of big and small franchises alike.
And since their income is solely dependent on commissions, they are directly motivated by franchise sales. This alone makes them the best kind of salesforce possible.
Apart from new franchises, they are also actively involved in the sale of existing franchises. This makes them the key to the mobilization of the industry throughout the US.
They are active drivers that help franchisors grow their business.
Franchise consultants are independent of any brand. This means they have the freedom to support multiple companies at the same time.
Thanks to their huge network of candidates, they are also able to spread the word about a new and rising franchisor. This is even more effective than marketing and advertising as it is in a more intimate, consulting space.
Even if one candidate is not right, the franchisor brand becomes known and more individuals can be aware of their presence. This is how to franchise consultants help franchisors grow.
In other words, they are instrumental factors in the growth of the franchise industry. They bring together the best franchise owners with the best franchise opportunities.
They will differentially evaluate candidates.
Franchise consultants are like franchisors’ key to candidate evaluation. After all, it is in their financial interest to ensure the best fit for any given franchise brand.
They will also be able to give a more unfiltered perspective of potential candidates as they operate outside of the corporate atmosphere.
They understand franchise law
Lastly, franchise consultants are well-versed in franchise laws and regulations. They can advise franchisees on the full scope of franchise requirements to help ensure a smooth process.
This is also why they can be such good advisers when it comes to franchise growth and expansion.
It is clear that franchise consultants are key players in franchise growth. They are the bridge that connects franchise brands with franchisees and helps ensure the success of franchise operations.
6. When To Consult
A franchise consultant can also help you avoid common pitfalls and mistakes that can occur when entering the franchising industry. With their expertise and experience, they can provide valuable insights into franchise-related services and advice that can help you make informed decisions and increase your chances of success.
Listed below are some scenarios that should prompt you to reach out for a franchising consultation.
1. When you’ve done your research and feel ready to take the plunge into franchising:
You’ve done your homework on franchising and you feel like you’re ready to take the plunge. Now it’s time to turn to an experienced franchise consultant who can help out with all the practical and business-oriented parts of franchising.
A consultant…
- has seen the process unfold before;
- they'll be able to ask the right questions,
- they'll be able to ask the right questions,
- pinpoint areas that could use more consideration
- and offer tips or insights on how to thrive in a franchise.
- Plus, a consultant will make sure your research really pays off by aligning your expectations with reality
- Plus, a consultant will make sure your research really pays off by aligning your expectations with reality
- and ensuring that the franchising journey you embark upon is as successful as possible.
2. When you need advice on what business and franchise opportunities are available
Opening a business can be a daunting prospect, leaving many uncertain and overwhelmed about the opportunities available. That’s why it pays to get advice from an expert consultant when considering what business or franchise you should launch.
A franchise consultant is an invaluable asset that can provide comprehensive insight into the real potential of each opportunity, helping you make an informed decision for your future. With their knowledge of the industry and current trends, they are ideally placed to offer clear direction and advice so don’t hesitate to reach out.
3. When you need industry expertise to guide you through ownership
Purchasing a franchise can be a complex process, and navigating it without industry expertise can leave you feeling lost or overwhelmed. That’s why hiring a franchise consultant is a wise investment when you’re considering franchise ownership.
Franchise consultants…
- offer a wealth of knowledge and experience about the industry,
- along with invaluable guidance about choosing the right franchise for your specific needs and goals.
- They can also assist you with developing a solid business plan and outlining the necessary steps for successful ownership.
On the other hand, there are several risks involved in venturing into a franchise without consulting a franchise expert or consultant:
Limited Knowledge
Without proper knowledge and understanding, you may make uninformed decisions that can lead to costly mistakes.
Inadequate Research
Without their guidance, you might not conduct thorough research on franchise opportunities, resulting in a lack of understanding about the market, competition, or the franchise’s viability.
Financial Risks
Without proper analysis and understanding of the franchise’s financials, you may underestimate the costs or overestimate the potential returns, leading to financial strain or even business failure.
Lack of Support
Without their assistance, you may not have access to the necessary training and support systems, making it challenging to operate the franchise effectively.
Negotiation Challenges
Franchise agreements can be complex, and negotiating favorable terms requires expertise. Without a franchise consultant, you might find it difficult to navigate the negotiation process, resulting in unfavorable terms and conditions.
Missed Opportunities
Franchise consultants are constantly updated on the latest trends, emerging concepts, and franchise opportunities. Without their guidance, you might miss out on potentially lucrative opportunities or innovative franchise models that could have been a better fit for your goals.
4. When a franchisor is pushing too hard for a sale but it doesn’t feel right
In franchising, a franchisor can sometimes come on too strong in pursuit of a sale. If this pushiness leads to a feeling that something just isn’t right, it’s time to reach out to a franchise consultant.
An experienced professional can provide insight into the franchisor’s motivations and recommend whether or not the franchisor is worth pursuing as an investment.
There are hundreds of franchising opportunities out there and knowing when to call in outside help helps us narrow down our choices to those that are most likely to give us the best returns.
5. Time for some honest real talk about the pros/cons of different businesses
Being in business is hard work, and sometimes you need another perspective to help weigh the pros and cons and decide if you’re ready to consult on leaping franchising.
With their expertise in all things franchise-related, a reliable consultant can throw you a lifeline during times of uncertainty and offer up key insights on what makes franchising worth your while.
All it takes is for you to reach out for the consult; the rest comes easily.
6. Before signing any contracts or committing to anything financially
If signing a franchise agreement is in your future, then make sure you reach out to a franchise consultant first. A little bit of advice goes a long way and can help stop you from signing up for something without all the information.
You don’t want to find yourself in an all-too-familiar situation– signing contracts or even committing financially before really understanding what it’ll entail down the line.
Before signing anything, make sure that you understand your rights and responsibilities so that the transition into your new business path is smooth sailing!
7. Feeling overwhelmed by the process
Faced with feeling overwhelmed by the process of franchising? Take a step back and take a breath – you don’t have to figure it all out on your own!
Reaching out to a franchise consultant is one of the best decisions you can make when feeling a bit over your head. Franchise consultants have been through the process themselves or helped guide many others through. So they know the ins and outs of proper franchise regulations and can give insider advice on how to proceed strategically.
So don’t let feeling overwhelmed get in your way – reach out and get started on your journey toward success with a franchise consultant as soon as possible.
Final Thoughts
Leveraging the expertise of a franchise consultant can be key to successfully navigating the complicated world of franchising. They have the expertise and experience to guide you through every step of the process and help you make informed decisions that can increase your chances of success.
From conducting research on potential franchise opportunities to providing ongoing support and training, a consultant can help ensure that your business is headed down the right path.
Whether aspiring business owners or seasoned entrepreneurs, working with a franchise consultant can provide many benefits and help one achieve goals. With so many options in the United States, it’s no wonder that choosing can be overwhelming.
Fortunately, franchise consulting services are available at no cost and can help you discover the business that fits you best.
So, if you’re considering entering the franchising industry, consider reaching out to a consultant to see how they can help you achieve long-term success. All you need to do is schedule a call for your free consultation.
