Should You use a Franchise Consultant/Broker to Buy a Franchise?April 15, 2022
Franchise buyers can use a franchise consultant/broker for free. There are approximately 1500 consultants/coaches across the USA today. But should franchise buyers use a consultant and why?
There are two options when buying a franchise. Go direct to the franchisor, or use a broker, consultant or coach.
If you go directly to the franchise they might be honest, ethical, and a decent opportunity, or they might be one of the sharks that will tell you everything you want to hear just to sell you a franchise. There are a lot of those! and inexperienced buyers have no idea what to look for, to determine if a franchise is a risk. That is one of the reasons for the huge failure rates in franchising. Thousands of people every year, who thought they were making a good decision, lose their money.
Even if you are lucky and find an good, ethical franchise, you are still going to hear only one side of the story. They arent going to tell you if there might be more profitable options or options better suited to your skills, operational preferences or local market demand.
So obviously it makes sense to at least check and see what else is out there. And you arent going to find the best options randomly clicking around the internet hoping to find a good franchise. A franchise consultant has the insider information the franchises wont give you until after a few interviews. Consultants know the potential profits, failure rates, lawsuits, market pressures, and more. Or at least they should know. And same as any business some consultants are good some are great, and some are terrible.
So yes, call a consultant, even just to get a second opinion, it costs you nothing and they could help you dodge a costly bullet, or find more profitable options better suited to your market demand.
At Franchise City, we do all that but go a few steps further as we have studied the reasons why people fail in business, and help buyers research their choices in greater detail.
First we set you up with an experienced franchise coach. We have franchise founders, multi unit franchise owners, all with at least 10 years of successful entrepreneurial experience. We’ve helped hundreds of people through the process, we have the connections and the industry expertise.
So instead of randomly clicking around the internet hoping to find the best brand, your coach gives you a business questionnaire and skills assessment. We need to understand your business goals, what type of work do you like, how hard do you want to work? Is this a passive business or owner operator? what are you good at? Hate or love sales? Good or bad at managing people. What is your exit strategy, your risk tolerance and more.
Your coach helps you shortlist the franchise options from the 4000 options that are suited to your investor profile. Our skills assessment also predicts your performance in hypothetical business environments before you invest. So if your skills profile indicates you are not good at sales, there are certain franchises you want to stay away from. Great at managing people, there are some fantastic options you want to look at. The “best” franchise for you, is the one that you will enjoy operating, and are good at operating. Also you need to align the franchise with your local market demand and demographic, we help with that as well.
You and your coach look at these options and you select which ones to engage. We’ll set up all the calls, and you begin the formal diligence process with the franchises. There are a ton of things you need to know, what questions to ask the franchisor, can I speak with other owners, yes you can and we show you how to do that, help set everything up and provide a library of tools to help you through the process. We help you compare all these franchises to find the best one -ad if there is no obvious winner we prepare a custom report for you that is a comparative analysis of your options so you can quickly compare potential earnings, territory sizes, failure rates, lawsuits and more.
We also provide comprehensive industry reports, these cost $1,000 online, you get those free through Franchise City, they show the strengths, weakness, opportunities and threats of any given industry. It is amazing how many people invest without knowing the long term forecast of an industry.
By the time you decide to invest, you have done all your research, you have explored multiple options, you understand the risks and have calibrated your risk with the right brand, you have consulted with a highly experienced professional and weighed all your options.
And again, it’s a free service, the same as using a real estate agent or your business broker and your franchise costs exactly the same if you go direct or if you work with franchise city. So yes, call a franchise consultant even to just get a second opinion. It could save you a fortune