Posted in Franchise Consultant on June 17, 2011
Buying a franchise is a huge decision and it’s a complicated process to go through. Finding a franchise business consultant to guide you can seem like a great idea. Here are our top 10 questions to ask a consultant before hiring her to help you…
1. What’s the fee structure – how much do they charge? If they say it’s a free service, it means they’re effectively working for the franchisors, because they’ll make nothing unless you buy one. Since starting up in business on your own without a franchise is a very real alternative, if the consultant is commission based, they’re very biased towards you buying a franchise from the moment you start talking to them.
2. How much commission do they earn? Find out what commission they are paid from each franchise that you’re interested in. Also find out the commission from other franchises that they’ve decided to exclude from your search. Should a franchise have been ruled out just because the consultant makes nothing?
3. How do you assess the suitability of clients to franchising – do you offer personality/suitability tests? There are many psychometric and behavioural tests available on the market today for reasonable cost (from $50-$1500 depending how accurately you want to be assessed). You can reasonably expect a good consultant to want to make sure you’re a great fit for franchising before trying to offer you a franchise. It’s such a big commitment that you don’t want to make a mistake that you’ll regret for years to come.
4. How many franchisees have you helped in the past? Ask to speak to a few – make sure they’re all from different franchises and talk to people who have been unsuccessful too, if you can. The secret here is find a broad spread of customers from the consultant to find out just how valuable the advice that you’ll soon be paying for has been to them.
5. Are you, or have you been, a franchisor, or working for a franchisor? If the franchise consultant has been a franchisor, or still is one, then she’s from the wrong side of the tracks as far as you’re concerned! The franchisors make money by selling franchises. They do not understand the challenges facing franchisees and will have no real empathy with your position, just a desire to get you to part with your hard-earned cash.
6. Have you been a franchisee yourself? Somebody who’s walked a few miles in your shoes will have a lot better understanding of your needs, your worries and your concerns. They’ll also be in a much better place to ask the tough questions of the franchisors and to help you hammer out a deal that works for you.
7. Which franchises would he recommend you avoid? A good franchise business consultant will have found franchises that she does not like and will be happy to tell you which ones you should stay away from. That’s a key part of the relationship you’ll have with your consultant – the trust levels must be very high if you’re to enjoy a successful outcome.
8. Are franchise agreements ever negotiable? The right answer to this is yes! Although the bigger and more established franchisors will accept very little, if any, variation in their terms and conditions, newer and less developed franchises are looking to make sales. If they want to make a sale and you’ll only sign when certain conditions are met, that’s perfect conditions for a negotiation! A franchise business consultant who’s not aware of this, and who thinks the franchisor has all the power before the agreement is signed, should be avoided.
9. How will the consultant add value to your buying process? What materials, experience and advice will they bring to the table in order to earn their money? If they’re just acting as a broker and putting various franchises on the table, you can achieve the same ends yourself by going to a franchise show or browsing the franchise directories. They must have something more to offer.
10. What questions should I ask the franchisor? A good franchise business consultant will have a list of carefully prepared questions that help you get to the pertinant facts quickly and accurately. If they’ve just got a page with a few key points on it, the chances are that they’re just sales agents and not a lot more. For example, The Franchise Opportunity Workbook has over 20 pages of powerful questions to help you pull back the covers off your potential franchisors to make sure they really earn your investment.