Starting a business through franchising or franchise expansion of an existing business can feel overwhelming for new entrepreneurs and business owners. There are many things to think about, such as intellectual property, trademarks, franchise fees, startup costs, training and support, and marketing.
When faced with all of these factors, it can be very helpful to talk to someone who has knowledge and experience in the franchising industry, apart from the franchisor. It’s best to get an outside opinion from someone who can help you make a smart and informed choice about your future. That person is known as a franchise consultant.
If you’re unsure about what franchise consultants do or how they support future business owners, this article will explain their role. We’ll also look at how franchise consultants are different from franchise brokers.
What is a Franchise Consultant?
To better understand what a franchise consultant does, it helps to look at the meaning of the word “consultant.” A consultant is someone with knowledge and experience in a certain area who gives advice to others.
In the case of franchise businesses, franchise consultants give advice to people who are thinking about becoming franchisees. Their guidance helps potential business owners choose the right franchise that fits their goals and budget.
A franchise consultant can answer questions, help explain the process clearly, and support clients in choosing the right path. They can give honest feedback and make sure that any money you invest goes toward a business that is right for you.
What Does a Franchise Consultant Do?
Franchise consultants can support their clients in many different ways. They can give advice, help narrow down choices, and assist in picking a franchise that suits the client’s interests and financial situation.
They can also review franchise agreements and explain key terms and responsibilities that new franchisees need to understand.
In addition, franchise consultants help clients decide on the most suitable ownership structure. They also make sure the business matches the client’s personal and professional goals, help them pick the right brand, and guide them through other important steps in the process.
Are Franchise Consultants and Franchise Brokers the Same?
While some people use the terms interchangeably, franchise consultants and franchise brokers are not exactly the same. They differ in a few key ways, such as who they work for, how they get paid, and what they do.
Here is a breakdown of how they compare:
Franchise Consultant
- Who hires them: Usually hired by people who want to start a business by buying into a franchise.
- How they are paid: Their fees can vary. Some charge a flat fee for their services, while others may charge an hourly rate.
- Main responsibilities: They help people choose the best franchise for their personal goals and financial plans. They guide clients through the decision-making process and help them understand what to expect.
Franchise Broker
- Who hires them: They are usually hired by franchisors who want to grow their business by adding more franchisees.
- How they are paid: They typically earn a commission for each franchise deal they help close. This commission is often between 10% and 20%, although the rate can vary.
- Main responsibilities: They find and screen potential franchisees for specific franchise brands. They often market the franchises they represent, which can limit the number of choices available to the person looking to invest.
Conclusion
Talking to a franchise consultant can be a smart step if you’re thinking about starting a business with a franchise. Their advice can help you feel more confident about your choices. However, it’s still a good idea to speak with the franchisor directly and talk to current franchisees in the network. This way, you can get a complete picture and see if the opportunity is the right one for you.
