Industry Expert Weighs in on Franchise Consultants

Posted on September 13, 2011 by Ben Baggett

Franchise Gator sits down with Dan Martin, Franchise Strategy Coach & IFX CEO to get his take on using a Franchise Consultant/Broker as well as some good advice for someone looking to venture into franchising.

Dan Martin's franchise experience goes back to 1983 when he started with a Franchise Management company.  This eventually led to his starting his own Franchise Management and Marketing Firm and later,   becoming a franchisee in a national fast food franchise – and owning over 14 locations.

This extensive experience has given him great insight from both the franchisor's and franchisee's vantage point.  He's also been involved in the International Franchise Association for many years including serving on the Board of Directors.   

Using a franchise consultant or broker has become a hot topic today and we were interested to hear Dan's take from a Franchisee's perspective.

What is a franchise consultant/broker?

A franchise consultant is an independent representative who advises a franchisor on how to structure and or implement a new franchise program in aspects of development, operations or administration or anything relating to the franchise organization.

A franchise broker is a representative that is solely involved in the sale of franchises and franchise development.

What are the pros and cons of using a consultant?

In this economy the pros and cons of consultants have been inflated greatly.

The pros of using a consultant include:

• Being able to obtain C-level expertise from a seasoned executive at a fraction of the cost of employing them.
• By using an consultant, you now have expertise available to you that crosses brands and industries based on the consultant's background.
• Consultant have connections that go way beyond those of a hired employee even if they could potentially be at the same level.

Cons include:

• There is no certification process for a consultant. There is a CFE certification but that certifies an expertise and understanding of franchising as a whole.
• Due to layoffs and downsizing, there has been an influx of people with no experience that are claiming the title of "franchise consultant." It is always important to check out their background before working with them.
• People who have spend their lifetime in a business are not necessary capable of being a consultant. It is important to remember when selecting a consultant that years in a business is very different than advising a company.

How do I find a good consultant?

It is important to find a consultant that you feel comfortable with, and most importantly you can trust.

How does a consultant get paid?

Typically, the franchiser pays the consultant for his/her services.  Usually, franchisers pay consultants a percentage of the new owner's franchise fee that is paid when they sign on.

How do I ensure that the consultant is making recommendations that are best for me?

 It is important to find a consultant that works with a variety of brands. It is almost impossible for a consultant to know of every single available franchising opportunity, however, they should know about multiple opportunities within multiple industries.

What qualities do you think make a good franchisee?

People who are driven, entrepreneurial, dedicated and patient usually make the best franchisees. Any quality you need to start and run your own business- you need to have to run a franchise.

What is your favorite advice for new franchisees to help them succeed?

 I like to tell all people looking into franchising that it is best to directly follow the franchisor's advice. This falls along the same lines as not trying to reinvent the wheel- if it has been successful for so many others, why fix something that isn't broken. Additionally, form a community with the other franchisees- implement their advice with the advice of your franchisor because working together is always easier  than working against each other.

What would you tell potential franchisees that may be nervous about the financial burdens of starting a franchise.

Make sure you take into account all expenses. Talk to all the franchises you are looking at to see what costs may come after the initial fees and make sure it is still a good financial fit.