With the franchise industry growing and shifting so frequently, business opportunities are truly abundant. The Great Resignation has contributed to this even more.
Individuals are quitting their job and starting new careers where they can be their own boss. Becoming a franchise owner is now easier than ever. Or is it?
For those aspiring business owners, information can often be overwhelming. Franchise portals with hundreds of brands that can fit all types of interests. Free personality quizzes to see if the computer thinks you are a good fit too.
Then there are the Lists with the Top Franchises in each Industry to provide yet another perspective. Not to mention everything can be filtered by investment level, training provided, franchisor support, and the list goes on and on.
Most potential franchisees reach a critical point where research alone is not enough. The next step is to seek expert advice, this is where franchise consultants come in. They are there to support you in figuring the franchise world out.
So What is a Franchise Consultant?
There are six things you should know about a franchise consultant, these are:
- What does a franchise consultant do?
- Is a franchise consultant the same as a franchise broker?
- How do they get paid?
- How much does a franchise consultant 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, franchise consultants are prepared to:
offer experienced guidance to take franchise opportunities to the next level.
actively advise franchisee on
Therefore, franchise consultants are dedicated to helping current and prospective entrepreneurs answer two major questions:
This puts a lot of importance on the franchise consultant who is helping you find the ideal franchise opportunity. It is therefore essential that you evaluate their expertise in the…
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. Is A Franchise Consultant the Same as a Franchise Broker?
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.
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 business, 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.
Since a franchise business consultant only gets paid once a client has a successful 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 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 a completed franchise sale.
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 US. 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 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:
Franchise consultants help 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
Getting assistance from a consultant knowledgeable in franchise-related services can enlighten you and ensure that your business is headed down the correct path.
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 consultant who can help out with all the practical and business-oriented parts of franchising.
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 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
This experienced, highly educated professional can provide you with the industry experience and expertise you need to succeed on your franchise journey.
With the guidance of a franchise consultant,
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. When it’s 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. As soon as possible if 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.
Leveraging the expertise of a franchise consultant can be key to successfully navigating the complicated world of franchising. They offer invaluable insight into business operations, help identify potential franchisees, and provide the vital information needed for making smart investments.
Are you courageous enough to enter the realm of franchising? 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 guide you through your options until you discover which business is best suited for you.
When you are ready to take on your dream, we are here to advise and support you. All you need to do is schedule a call for your free consultation.