First of all, why is independent franchise advice so important to you?
Because just about everybody you speak to in a professional capacity about franchising wants you to buy a franchise. Let’s just go over your options to more clearly make the point…
Franchise Associations – the franchise associations, such as The International Franchise Association covering the USA, the Canadian Franchise Association and the British Franchise Association, are self-governing organisations that represent and protect the interests of franchisors.
They are not there to protect the interests of franchisees. You have to be a franchisor to become a member, rather than a franchisee and so it’s hardly likely that they’re going to give a balanced view of both the positives and the negatives involved in the franchise advice they offer.
Other Franchisees – these have spent thousands themselves on the franchise. Most will tell you what a wonderful business it is and how fantastic an opportunity it presents. That’s simply because they’ve bought it themselves and to tell you that it’s no good they’d have to also admit to themselves that they made a bad choice.
They simply won’t tell you the bad news – so the only information you can really trust from other franchisees are the hard facts about their business: how long have they been in business, how much profit do they make, what do they find tough, will they renew at the end of their franchise term. You can base your own opinions then on the facts of the situation, to balance their opinions.
Lawyers – in our experience it seems that lawyers fall into two broad camps. There are those who deal with a lot of franchise agreements and are specialists in franchise law, and there are those who are general business lawyers.
The specialist franchise lawyer will probably tell you that franchises are good, that you can’t change the content of franchise agreements significantly and that as an established business model they are a safe bet. What they don’t mention is that as a specialist franchise lawyer they need people to keep buying franchises – their own specialist law practice depends on that business!
The general business lawyer is a far safer and more neutral animal. They have no vested interest in whether you buy or not. However, most lawyers will only advise you about the legal aspects of your franchise agreement. They will help you to understand the commitments you’ll make when signing up for your franchise but only from a legal perspective. You won’t get a broad, general business perspective to help you evaluate the pros and cons in a useful way.
Accountants – are great at saving you money on tax bills and protecting your business. However, they don’t normally have much direct experience of marketing and branding, both of which are critical elements of starting up a franchise business for yourself. They also stand to gain a customer if you buy a franchise, so they’ll help you to structure your purchase and to minimise the tax bills relating to being a franchisee, but they’re not going to advise you on the wrinkles involved in becoming a franchisee.
Franchise Consultants – many of these work on commission for the franchisors and so they want you to buy. Steer well clear unless they will give you complete disclosure of how much commission they make per franchise sale. It’s not uncommon to earn $5,000 or more per franchise sale, making it a lucrative way to make an income for the unscrupulous salesman.
Remember also, that as you put your trust into a franchise consultant, they will have a strong influence over your decision making and the facts and figures you hear. You’ll learn only about the franchises they can make the most money from and will hear only the good news about them.
On the other hand, if you can find a franchise advisor or consultant who takes payment from you for helping you and does not make any commission from sales, you’re far more likely to get truly independent advice.
Friends – be very careful here. Every friend will have an opinion and want to give you advice without any kind of expert knowledge or experience. Would you take medical advice seriously from a friend? Would your friends tell you if your wife or husband was cheating on you? Or are they only likely to tell you the good news? Most of our friends don’t want to pee on our parade! They’ll tell us the good news to keep us smiling and then join us in complaining if it all goes wrong.
So, getting impartial franchise advice is clearly difficult to do. That’s the need that The Franchise Opportunity Workbook was created to fill, and it’s the same reason that this website has grown from being a single-page sales letter to the information rich site that you’re now on.
Ultimately, each and every franchise offers something different and you must gather information from various sources to form your own panel of expert franchise advice.