Franchise Consultants: Their Roles and Responsibilities Salem OR

With the ups and downs of the market and uncertainty affecting every industry, many people are searching for security. For would-be business owners, that can mean turning to a franchise rather than starting their own business, as a franchised business is one that comes with a proven track record and a built-in support system. Others, tired of losing money in the stock market, are interested in buying a business or franchise with their retirement funds .

Someone who is interested in purchasing a franchise may be familiar with the roles of the franchisor and the franchisee, but in researching franchises, they will likely come across what might be a less familiar term: franchise consultant.

In addition, there are also small business owners who are interested in franchising--that is, they would like to take their existing small business and turn it into a franchise, becoming franchisors themselves. To do this, many will work with franchise consultants.

So, what does a franchise consultant do? That depends on whether they are working with franchisees or franchisors.

For franchisees

A franchise consultant is someone who acts sort of as a guidance counselor for a potential franchisee by helping to guide them through the process of finding and purchasing a franchise and understanding the franchise industry. The franchise consultant can help the potential franchisee to analyze what the wisest franchise purchase might be based on their price range; whether they want a management franchise or for operating the franchise to become their full-time job; and what their strongest abilities and interests are. With their expertise, they can point out weak spots in a franchisor's offering or business plan.

Their effectiveness, however, can depend in part on how they are paid.

A franchise consultant who offers their services to a potential franchisee for free is someone who earns a commission. In order to bring home a paycheck, this franchise consultant will need to sell franchises; thus, they may try to push a potential franchisee into making a franchise purchase that isn't, in fact, the best deal because they need to make a sale to make money.

Franchise consultants who are paid by commission could still have great advice and insight and help the potential franchisee make a wise investment, but, as always, potential franchisees should be cautious and make sure their due diligence has been thorough. After all, "the process might work for quality franchisors that use [franchise consultants with whom they've built a relationship] to identify the right franchisees for their program, but the same process can be terribly unfair for inexperienced prospects that do not understand the dynamics," franchise expert Nick Bibby wrote in a column on his website, BibbyGroup.com.

There are also fee-only franchise consultants with whom potential franchisees could work. Because they receive their fee up front, they would not fall into the tr...

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