To Consultant or Not to Consultant …that is the question

It seems simple enough, you have run a business for years and years and people keep telling you --- "I sure wish we had one of these in our town". So eventually someone says it - FRANCHISE! Easy right, you have mastered your business and you may have even opened multiple units in your town and they all have been successful so it would stand to reason that if you were to franchise it would work out well.

What no one is telling you is that especially in the beginning, the success of your new franchise venture has a lot more to do with your franchise infrastructure and the early strategic decisions you make than the business concept you have developed and the experience you have been accumulating over the years. There are many quality franchisors that are very successful whose actual core products or services may not be the best in their industry but they perform a lot of important aspects of franchising very well so they thrive anyway.

Most emerging franchisors spend quite a while deciding to franchise and then get in great hurry to make up for lost time when they start the process…I sure wish it was the other way around. Upside Group was founded over ten years ago by working with emerging franchisors who were struggling in their first few years of business. Most of these initial clients had 15 units or less and would pay just about anything for a time machine to go back and make some different initial choices. The expense of the time machine ticket would be minuscule compared to the cost created by the domino effect of the early mistakes. Some of the initial choices they would use the time machine to change pertain to the creation of their franchise documents, creating their franchise sales process and choosing the right franchisees. Franchising is not a transactional process. It is a long-term relationship that requires those original seeds you plant to either blossom in to beautiful flowers or grow in to thick, unmanageable weeds.

On to the original question, to consultant or not to consultant…no it's not a typo. When you begin your journey into franchising you almost certainly would hire an attorney but do you hire a franchise consultant to help you create all the other critical items and assist you in making those original strategic decisions? You don't have to retain anyone with franchise experience. You actually can layout your own operations manuals, design and write the copy for your website and even create the franchise development process for recruiting franchisees on your own. With only a few choices for formal franchise education would you hire a franchise consultant to educate you on franchising? Do you seek out a franchise professional to help you understand the franchisor - franchisee relationship or assist you in creating a development process that not only sets the proper expectations with new prospects but follows a franchise compliance program and allows you to find the top franchisees that match your culture and system? It can start to sound daunting, so why wouldn't every new franchise company hire "franchise experts" to work along with them? From what I deduce it is for a few reasons. The first reason typically is cost. Most companies converting to a franchise model don't budget to hire a franchise consultant so when faced with going it alone or pay a franchise consultant, they roll the dice. The second reason is the false belief that we alluded to earlier that success in their current industry is the key to franchise success --- the idea that if I make a great pizza I will be a great pizza franchise. The final reason often is, emerging franchisors don't know what they don't know and no one is telling them. A franchise consultant might tell them but it's a slippery slope, how do you encourage the entrepreneur that franchising is a great industry without extinguishing their excitement as you begin explaining how many moving parts need creating and the intricacies involved? How do you balance telling a new franchisor how much you like their concept while at the same time communicating that if they don't slow down and build the proper franchise infrastructure they will almost certainly fail at this new endeavor? Image the scenario from the emerging franchisor's perspective; up to this point all they have ever heard was how great their business is and how they would be a great franchise --- no one has ever mentioned any possible negatives and the first person informing them of the challenges is the same person who wants them to sign a contract to help them avoid all the pitfalls they just pointed out! Franchising is a tremendous model for expansion and if the proper respect is given to the education and creation of your franchise system it will pay dividends early in your growth and for years in the future. So back to it --- to Consultant or Not to Consultant?

For me it is a simple answer, do you think your new franchise system has value to a burgeoning entrepreneur? Should someone join your franchise system or go it alone? Would the new franchisee in your system benefit from all your years of knowledge? You have probably forgotten more about your industry than a franchisee will ever know…why wouldn't they want to get all of your knowledge and not make all those expensive mistakes you made? The proposition of franchising is simple. Instead of trying it alone, pay a reasonable fee, (franchise fee), and I will provide you training and documentation that will greatly increase your learning curve and should make your chances at success much greater and shorten your time to profitability. Then we will continue to work together and I will make my experience available and continue to recommend services and vendors who will aid in your ongoing success and for that you can pay me a reasonable continuing fee (royalty fee). This seems very similar to the consulting relationship.

I guess what I took a long time to get to is --- if you believe strongly in the franchise concept, you by default have to agree with the benefits of the franchise consultant relationship. Starting any business has its challenges; if it was too easy everyone would do it. So for the same reasons a franchisee seeks out support from a franchisor to start a business, doesn't it stand to reason a franchisor who already agrees with that ideology would seek out an expert for their new endeavor and hire a franchise consultant?

So to Consultant or Not to Consultant likely depends on how committed you are to the ideology of franchising as the best model for starting a new business.

By Mario Altiery
President, Upside Group Franchise Consulting