The most difficult decision a potential franchisee is faced with is to choose the right franchise for themselves. Considering there were 90,000 franchises reported in 2010, it gets increasingly overwhelming to filter and comb through a huge number to arrive at an appropriate brand. This is where franchise consultants and franchise brokers come into play.
These individuals can be likened to matchmakers who exist to connect you with a franchise. But before you hire any, there is a subtle difference between the two that you must understand. They are both driven by different motivations to offer their services. So, before you team up with them, give this blog a read and it will help you arrive at a conclusion.
Franchise consultants work on a fee-for-service model. Basically, you make initial cash deposits to acquire their services. They are your advocates who will help you acquire the franchise that is most suited for you. The benefit of hiring this type of consultant is that they work in your interest only and have no hidden agendas. They do not get paid by franchisors to connect you with them. They are also not limited to a specific category of company. They can dig all the available opportunities for you and recommend tailored solutions that are relevant to you.
Franchise brokers, who like to call themselves franchise consultants, due to the truth behind the term ‘broker’, offer their services free of cost. Why, you ask? It would be naive to think they do it out of the goodness of their hearts. The real reason is that they are paid large commissions from the franchise owners if they succeed in sealing the deal.
Basically, they are working as recruiters. They sniff out prospective franchisees to sell. If you decide to work with a broker, keep in mind that their advice would be partially or wholly biased. Mainly their interests lie somewhere else. Their utmost concern is not to find you a perfect match, but to sell a franchise.
Make a Choice
Although it is tempting to work with a franchise broker, but you have to exercise caution in accepting their advice. If money is not a concern, then franchise consultants are the more appropriate choice. Their interests are not biased nor are they bounded by a limited number of franchises that give them commission. However, their services are expensive and it is difficult for most potential franchisees to afford one. Even though some brokers are knowledgeable, some of them have limited training. Therefore, they might not be able to guide you well.
Another option can also be to hire a franchise attorney. The attorney can point out legal issues. The attorney also can spot loopholes in the contract that an average franchise broker will overlook or hide from you.
So, the bottom line is—the ideal choice is to work with a franchise consultant if your budget allows.