Should I Use A Franchise Consultant to Find a Business

The Value of a Consultant to a Potential Franchise Buyer

In 1980 when I first became a franchisee there were no professional intermediaries to provide guidance to someone entering the world of franchising.

How I wish there had been. Three franchise’s later I would still highly value the service! Not only value them but also recommend them to individuals virtually on a daily basis.

But Why

My work is primarily with franchise companies. Once these franchisers, these companies have developed their concept; put it into a format; created the systems and tracking devices to determine success and positioned themselves in the market their real challenge begins.

Their greatest challenge is finding qualified potential candidates; someone who makes sense for the particular needs of franchise format business. I can tell you this with near certainty if you could line up 100 founders of established and growing franchise systems, any 100 franchise Presidents and CEO’s on any given day, 90 of them would regale you with tale after tale of poorly chosen or nearly disastrous franchisee selections. Many of those choices are my franchise buddies I am sad to say.

From the standpoint of the franchise company they (most often) could only wish to have had a professional providing guidance to their franchisees prior to the person having come onboard as a new franchisee with the company. I can attest to the value personally and from experience.
But what is the value to you; the potential franchise buyer? What does such a service provide?

Settling for Almost

There are many advantages to getting help from a professional who knows the inside workings of an industry or issue. Just having someone who can help interpret the terminology associated with a topic that is new to you can be a tremendous aid. Most people wouldn’t go to court without a lawyer or purchase a home without a realtor. A franchise consultant through the use of sophisticated evaluation tools can assist you to identify franchises most closely aligned with your investment level, skillset, goals, passions and expectations. Again, from personal experience you could spend months (and I’ve known some who searched for years!) evaluating a myriad of opportunities. You could be diligent in your efforts and still miss the best opportunity.

Many make the mistake of thinking the Internet provides solution. Not true. The Internet is a valuable tool for research, but it is limited. If you do not know where to look or if you rely on search engines to produce the results, you will only find the companies that have paid to be listed high in the search rankings. High visibility on the Internet does not correspond to the relative value of a business opportunity nor does it tell you anything about how you match up. Then too there are whole sites given to the detractors of a concept. Honestly, nothing prevents them from running amuck. Due to the immense amount of data that is available on the Internet, it tends to create more questions than answers and it can be a frustrating experience.

There are over 8,000-registered franchise brands and marks (about 3200 of which have more than 5 operating units) and more than twice as many “Business Opportunities” or “Biz Ops” available in the USA. A consultant can help you understand the difference between the types of opportunities so you can determine which format is right for you. Whether it is a franchise or Biz Op, there are many terrific choices and invariably there are many that are otherwise good businesses but a poor choice for you! A competent consultant can help you focus on businesses that have met certain quality standards and help you avoid making a potentially big mistake.

Consultants are rarely limited to a certain company or companies (at least the good ones) and can obtain the sell rights at no additional expense to you. The key is if it meets your profile as well as you matching their qualifications (this is a business relationship and decisions are determined mutually). It is possible that your consultant has pre-evaluated concepts as well that cover a spectrum. The key advantage is that the agreements they do have are with solid, up and coming or established concepts that will meet the requirements of a variety of franchise buyers.

Thinking From Both Sides of the Table

As I previously mentioned, the great challenge for franchise companies is uncovering candidates who will be a good fit for their particular business model. As you can imagine, franchisers get thousands of requests yearly for their information packets, but most of these come from people who are not qualified or not particularly motivated to actually become a part of their organization or any organization. Franchises generally cannot support the amount of staff necessary to do an effective job of bringing in new franchisees. This is why the value of a consultant-referred candidate is so significant. The company is being introduced to a pre-screened individual who meets more than just the financial requirements, is informed about the opportunity and is truly interested in franchise business ownership.

The broker not only is an immense professional, educated resource for the buying public but also to franchise companies. Their professionalism saves the franchiser a great deal of time and money. This allows the consultant to minimally charge or perhaps not charge the candidate a fee at all. The franchise company pays a fee to the consultant if the candidate joins their system as a franchisee. This creates a winning scenario for all parties involved.

In the final analysis, the choice and the responsibility for researching the opportunity are the individuals; they are yours. But as you weigh up business ownership I would recommend you do not leave this stone unturned. I deeply and seriously even request you take advantage of it.
Getting help from a competent consultant is one of the best decisions you can make in your pursuit. They become a neutral, knowledgeable resource you can employ and since the seller (franchise company) pays the fee, the service is free to you.

So, the question becomes: Why would you not use a franchise consultant?

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at dr_franchise@consultant.com