Free Franchise Consulting – What That Means to You as a Franchise Buyer?
Here’s an Inquiry We Often Receive
I recently went through an evaluation with a firm offering free franchise consulting. They concluded that my best franchise opportunity was a concept in which I have little interest – fast food. My goal is a solid money maker and this might be a great investment, but it just doesn’t excite me. Am I right or wrong in feeling doubtful about this suggestion? Any thoughts?
Free Franchise Consulting can be Helpful, but There are Numerous Voids
First, you’re right; 100% right about having your doubts. Only you should decide which business best fits you and your needs. When a franchise or any business opportunity doesn’t doesn’t excite, run as fast as you can. If it doesn’t feel right, the money doesn’t matter.
The words ‘free franchise consulting’ are associated with a franchise broker. They will earn a commission or fee if you buy a franchise they represent. They can call themselves consultants or anything else, but they earn their money when a sale is made. True consultants charge prospective buyers for their services, whereas brokers work for commissions and post-sale incentives. While a franchise consultant can help clients study any franchise, the broker is limited to concepts that have agreed to pay a commission. The franchise consultant, not a broker, is able and obligated to coldly analyze a franchise and expose its weaknesses. Therefore, a broker is not going to disparage a franchise concept paying them a commission. If your consultant is not willing or able to provide hard franchise due diligence, you are lacking a necessary service.
Ultimately, nothing is free. After due consideration, the difference between a consultant and a broker is clear. This is not to say brokers are necessarily deceptive. In fact, your free consultant is probably very sincere in their recommendations. But understand this. When a bad franchise purchase is made, the cost goes way beyond the “total initial investment”; a bad franchise purchase WILL BE LIFE ALTERING. If you want to read about franchise horror stories, here’s your source. When your guide is paid as a result of you buying a franchise, you must question whether everything is being done to protect your best interests.
Study Competence, Experience and How the Consultant is Paid
Competent guidance is the result of knowing the franchise industry, how it works, how to investigate a concept and being dedicated to the buyer. Nothing replaces experience and a plan for building a relationship between the client (buyer) and a possible franchise. Understand that many ‘free franchise consultants’ are franchisees themselves. They’ve purchased a franchise to ‘be a franchise consultant.’ While well intended, how knowledgeable and experienced is your guide?
The first step in owning a franchise should be a personal assessment to define oneself in a self-employed environment. A test or questionnaire does not provide that kind of insight. Our proposed launching pad for reaching reasonable conclusions about yourself is The Focus Program for Emerging Entrepreneurs. In this program you are challenged to study yourself, reflect, and create a personal portrait of yourself as an entrepreneur.
Here’s the bottom line. Free franchise consulting can provide an introduction to franchising and a variety of opportunities they represent, but if you are buying a franchise and want sound counsel and serious due diligence dedicated to your protection, a fee for service consultant is for you.