FRANCHISE CONSULTING

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Franchise consulting, a specialized category of professional assistance for investors, entrepreneurs, and enterprises, is a field which has arisen from the increased popularity and profitability of franchising, a business practice with reputed beginnings in mid-19th century America^[1].
Potential franchise owners ( “franchisees” ) employ the services of a franchise consultant to assist the franchisee in picking the correct franchise company ( “franchiser” ) in which to invest. Conversely, franchisers employ the franchise consultant to act as an agent between themselves and interested franchisees.
The majority of franchise consultants offer their services free (or virtually free) of charge to the franchisee, primarily receiving remuneration from franchisers.

Overview

There are thousands of different franchisers in operation worldwide. Due to a franchises’ instant (and often global) brand recognition, franchises are considered by many entrepreneurs as a relatively fast and low-to-moderate risk method of owning and/or operating a business.
The utilization of franchise consultants by franchisees and franchisers has become an acceptable way to bring serious sellers and buyers together, essentially streamlining the “matchmaking” process. Along with a franchise attorney and franchise-knowledgeable accountant, a franchise consultant navigates the complexities of finding and/or attracting viable partners on behalf of franchisees and franchisers.
Much like a realtor, the franchise consultant typically charges no upfront fees to “buyers” (franchisees); instead, he or she receives the bulk of his or her income from “sellers” (franchisers) and thus operates as a conduit between the two.
A few larger franchise consulting firms have branched out themselves, essentially “franchising” their franchise consulting businesses. And industry publications such as Franchise Business Review and Entrepreneur regularly quote high performing franchise consultants as reliable article sources.

Benefits

A reputable franchise consultant can help a potential franchisee comprehend the numerous details of franchising, including:

★ how to find the ideal franchise based on the franchisee’s background, capital, and expectations, sometimes with the help of a personalized assessment test^[2].;

★ how to read and interpret the Uniform Franchise Offering Circular (UFOC);

★ how to understand the Franchise Agreement contract;

★ how to evaluate trend and economic data;

★ how to realistically examine personal strengths and weaknesses;

★ how to uncover free and fee-based training programs for potential franchisees;

★ how to market specific types of franchises; and

★ how to build franchises.
Franchise consultants play the role of time saving “middle men” for franchise seekers. Using their industry knowledge and insider information, franchise consultants eliminate guesswork for their clientele, lessening the likelihood of franchisees being “scammed” by unethical companies.
In addition, franchise consultants help franchisees decrease their amounts of spam email, “junk mail”, and/or unwelcome phone calls during the search for franchisor information.
Similarly, a dependable franchise consultant can assist a franchisor (or would-be franchisor) by:

★ pre-screening franchisee candidates;

★ saving time and money by “weeding out” spurious investors;

★ giving the franchisor marketing, advertising, and training advice;

★ evaluating his or her company to determine its franchise-ability (if it is not yet a franchise);

★ helping the franchisor attract franchisees by building brand recognition and loyalty; and

★ assisting the franchisor in obtaining public visibility and investor interest.

Challenges

Franchisors are required to pay franchise consultants fees to generate interest in their franchises; hence, possible franchisees can be limited in their choices if a franchise consultant does not have many franchisors as clients.
Additionally, untrustworthy franchise consultants, motivated solely by profits, may suggest unwise franchisee-franchisor relationships purely to generate income from franchisors.
As of June 2007, there is no one international governing body dedicated to ensuring franchise consultants’ reputations nor is there any specific credential that a franchise consultant must obtain to give him- or herself the moniker. Consequently, franchisees are often reminded that reputable franchise consultants have prior experience as either franchisees or franchisors, have numerous satisfied clientele, and carry no unresolved complaints with the Better Business Bureau.