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CONSULTING SERVICES

CHOOSING A FRANCHISE

Home > Choosing a Franchise > The Consumers Guide to Franchise Consultant Services

The Consumers Guide to Franchise Consultant Services

Maximizing Your Effectiveness

Going into business for yourself is as exciting as it is overwhelming. There are so many things to think about-one of the most important being what type of business you will start. It is well known that franchising provides a more stable entry into the world of entrepreneurship; however there are thousands of different directions to take. Which one is right for you?

The most popular franchise businesses, not surprisingly, are restaurants. There always is demand for food and many people have idealistic notions about owning and operating a restaurant. Some people are, in fact, cut for this line of work, while others may not be up to the challenge, which is not a bad thing, as there are hundreds of other opportunities out there and one is bound to be the perfect match for you. Understanding the restaurant industry from a consumer's point of view is completely different than from a business perspective. There are many franchise opportunities on the market that may be more appropriately suited to your specific skills set, experience and interests.

The Benefit of a Franchise Consultant

Franchise consultants, who specialize only in franchises, can help you pinpoint the best opportunities for your unique situation, plus save you invaluable time and energy by having information at their fingertips, which may take you weeks or even months to compile on your own. Knowing where to start the process is a great area for some, as each person's situation varies and different criteria come into play based on myriad circumstances, including what type of franchise to pursue, financing, and location, to name a few. There are dozens of websites that list franchise opportunities, however, some of the listings overlap and many of the listings are paid listings, meaning that the franchise company pays to have their opportunities listed. Franchise consultants have done all the research and have access to a comprehensive database of pre-screened franchise opportunities-best of all it's free. Franchise consultants receive payment from franchise companies and only if you buy a franchise

"We help you sort through the clutter," said George Knauf, a franchise consultant with FranChoice (www.franchoice.com). "There are around 5,000 franchise companies. The challenge is to get a grasp on what's out there and narrow it down. As an individual you're recreating the wheel. There is an immense amount of time and expense and you may miss out on opportunities because franchising is not your specialty. You have to be selective when making this type of investment and franchise consultants can help you consider things you've never thought about."

Quick Glance: Advantages of Using a Franchise Consultant

• Franchise consultants have access to thousands of pre-screened franchise opportunities, saving you precious time and money, so you can start your business more quickly.
• Franchise consultants have existing relationships with franchise companies, which often makes the entire process easier.
• Franchise consultants generally have extensive experience on both sides of the franchising industry and can offer sound advice, helping you to avoid common pitfalls.
• The service is free to franchisees.

Finding the Right Franchise

The perfect opportunity may not be the one with the biggest advertisement in Entrepreneur Magazine nor may it be the most romantic choice. Franchise consultants can help prospective franchisees work through preconceptions about certain industries, thereby broadening your options and potential earning power. "The strength of franchise consultants is their experiences as franchisees and in the industry as business owners," Knauf said. Based on their past experience, franchise consultants can walk you through many stages of the franchise process, including financing options, advertising, managing staff, and opening challenges.

Additionally, franchise consultants have extensive databases of franchise companies that meet the franchise consultant company's standards, whatever they may be. Franchise consultants worth their salt interview representatives of each franchise company and thoroughly research each opportunity for its merits and potential pitfalls. "It's all about value," Knauf said. "We're not here to sell you something. We build our business through referrals-in fact, some of our best referrals have come from people who did not buy a franchise." Reputable franchise consultants will not pressure you to buy a franchise when you are not ready or if the opportunity is not in alignment with your skills and experience or interests. Above-board franchise consultants will not sell you any franchise simply because you want to buy it either.

Finding the Right Consultant

There are various business models for franchise consultants. Most receive payment from the franchise companies if you buy a franchise; most do not charge the franchisee for any part of their services. There are several franchise consultants out there, how can you find one who will best serve your needs? Knauf recommends interviewing potential franchise consultants as if it were a job interview. "Spend time getting to know this person because you will be spending a lot of time with them."

One critical characteristic every franchise consultant should possess is franchise experience. Find out if they have experience on the franchisee or franchisor side of the business, or both. If you feel that the relationship is not a good fit, go back to the drawing board and find someone with whom you click. There is a lot at stake and you want to have a consultant who will look out for your best interests. Another thing to consider is how a franchise consultant came to be with his or her company. Some franchise consultant companies are franchises, while others are not. Some of these franchised companies will sell a franchise to anyone with the desire and the franchise fee. Consultants for FranChoice must receive an invitation to join the company versus accepting unsolicited franchise buyers into their program.

Checklist for Hiring the Right Consultant

• Franchise consultants should have substantial franchise experience, especially as a franchisee.
• Service fees should be paid by the franchise company, not you.
• Franchise consultants should be open to talking with you frequently and accessible throughout the process.

Getting the Most Out of Your Franchise Consultant Relationship

The best way to get the most out of your relationship is to stay in contact with him or her. Knauf advises his clients to aggressively investigate opportunities he tells them about. He recommends that his clients interview franchise companies using questions he has suggested. "The more I talk to the candidate the easier the process," said Knauf. "Don't ever feel guilty about calling your consultant."

It is important to understand the role of a franchise consultant in order to get the most out of the relationship. Franchise consultants typically are not brokers or franchise opportunity list peddlers. Franchise consultants serve more of a mentor role from which you benefit from their experience in the industry and their familiarity and working relationships with thousands of different franchise companies. "It's not about the list, you can get those anywhere, it's about having someone work with you who has been through the process - that's worth it's weight in gold," Knauf said.

Franchise Worksheet

Pre-qualify yourself. Do you have $20,000 in cash and $100,000 in net worth? The higher up you go, obviously, the more options are available to you. Do you have the desire and flexibility to become a franchise owner?

Find a Franchise Consultant. Conduct an internet search or ask friends and colleagues for referrals. Visit the franchise consultant company's website and peruse their consultants' bios. Look for consultants who may have specific experience in your desired area or may be in close proximity to where you live. Once you have a shortlist of candidates call them and quiz them on their background and to get a feel for how your personalities mesh.

Find a Franchise. Follow up on the leads your consultant provides to you; interview franchisors and collect critical information such as the UFOC and other documents detailing every aspect of the franchise opportunity.

Get Financing. Everyone's financial situation is different, some may not even need financing. In the event you do, your franchise consultant can give you advice on which avenues to pursue and which loans are most appropriate for your situation and business concept. Some franchisors offer their own financing programs.

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