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Should I Use A Franchise Consultant?
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Buying a franchise can be a daunting task. Researching the thousands of franchise opportunities available can be both time-consuming and costly. Franchise consultants can help in this search, doing most of the work for you. But sometimes I hear or read negative talk about franchise consultants. In full disclosure, I personally am a franchise consultant. But I would like to use this article to address some of the arguments against using a franchise consultant and show why consultants can truly provide a win-win situation.

First, a look at what a franchise consultant does. Also known as franchise brokers, they wear two hats. A franchise broker recruits qualified candidates for a network of franchise companies. She also helps people looking to become business owners by matching them with franchise opportunities in her network. She gets paid by the franchise company for her services if she is able to make a good match.

Let's now look at some of the arguments against using a franchise consultant.

Franchise consultants can't look out for the interests of both buyer and seller. This is one of the biggest arguments against using a franchise broker, and one that I promise I can prove wrong. Let's break it down. If a franchise broker is being paid by the franchisor, how can he truly represent the needs of the potential franchise owner also?

Franchise consultants offer their consulting services for free, only getting paid if the consultee buys a franchise that is recommended to her. I think this is where concern is raised, as we have all been taught that there is no such thing as a free lunch. Obviously the consultant does not have the candidate's best interest in mind if he only gets paid if the candidate buys a franchise, right? I will show you why this argument does not stand.

It is not in the best interest of the broker to recommend a franchise to his candidate unless he thinks that candidate will truly be successful in that franchise opportunity. This is true for a couple reasons. He does not get paid by simply sending a candidate to a franchisor. He gets paid only if the candidate actually buys a franchise from the franchisor. And franchisors do not just sell franchises to anyone who has the money. They AWARD franchises to candidates who they truly believe will be successful business owners with their company and will continue to earn money for the franchisor.

Therefore, if a broker consults with a potential candidate and recommends her to a franchisor that he doesn't really believe she is a good fit for, then he will have wasted his time, his candidate's time, and the franchisor's time, because the franchisor will not award this unqualified candidate a franchise, and the broker will therefore not get paid.

Furthermore, if a broker makes a habit of sending unqualified candidates to a franchisor (although I'm not sure why he would), then the franchisor will recognize this and end the relationship with that broker. So as you can see, franchise consultants have no interest in recommending franchises to people who are not qualified. In fact, as a consultant, I spend most of my time weeding through the unqualified candidates to find the occasional qualified one. It is true that we get paid a sizeable referral fee when one of our candidates becomes a franchise owner, but this fee is not actually paid for that one person. It is paid for the hundred other candidates we worked with that did not turn into anything before actually getting to the one who was the right fit for a certain franchise.

What this means for you, if you are looking into owning a franchise, is that you can most likely trust a franchise consultant to have your best interest at heart. If he does not believe that he can successfully match you with one of the franchises in his network, he will let you know pretty quickly so that he can move on to more promising leads. And since consultants offer their services at no cost to you, you have nothing to lose and potentially a lot to gain.

Street Talk

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