According to Franchise Alliance , it is important to the future value of your franchise that you use a franchise consultant with experience; they will need to have the appropriate sector qualifications; and of course a proven history of success as a franchise consultant. One must recognise that quality and professional franchise advice with integrity does come at a price. Franchising your business is not going to be cheap, but it is a worthwhile and valuable investment to use an experienced franchise consultancy.
Of course, drafting a Franchise Agreement requires more than just legal qualifications. The operational documents need more expertise than a technical author alone can provide. A franchise feasibility study is of course needed before any of the initial or ongoing fees can be determined or documents prepared.
Any hitch in this development process could jeopardise the successful completion and implementation of a franchise program. At best, the "do it yourself" approach is likely to be slower and, believe it or not, usually more expensive in the long term, than getting help from a Franchise Consultant. You should factor your time into the equation as well as the potential for lost opportunities due to delays in completion. Don't forget, whilst you are developing your own franchise system you are not focussing on the real issue…improving and growing your business.
Consultant Qualifications
In assessing the qualifications of a franchise consultancy, several criteria should be examined closely.
Expertise
A franchise consultancy such as Franchise Alliance requires a strong blend of expertise in the strategic, financial and operational areas of franchise advice and planning. Ideally your franchise consultant should have direct experience as a Franchisor to fully appreciate the road ahead for you, and advise you accordingly. Experience as a Franchisee is also very valuable and not to be underrated. Ideally too, your consultant should hold the recognised peak qualifications for the franchise sector, those being the Australian Franchise Executive Certificate (AFE), and perhaps the Australian Franchise Management (AFM) qualification.
It is not simply a matter of having 'some experience' and hanging up a sign…anyone can do that!
A Track Record
The franchise consultant should be able to show experience and success in providing consulting services over a long period, and in Australia. They should be willing to publish a list of satisfied clients, both large and small and provide recent client testimonials to support the successful franchise advice given to you.
Value for money
The franchise consultancy should be able to provide a competitive quotation for the specific services required, and a realistic estimate of any other costs that the Franchisor may incur, before they start. Don't just look for the cheapest franchise advice available; you need the best that you can afford in the long term, not just for today. Some preliminary investigative work by the franchise consultant may be necessary prior to a complete quotation being provided.
Services
The franchise consultancy should be capable of providing most, if not all, of the franchise advice required by a Franchisor in the first year and beyond. It should have the capability to serve both new and established franchise companies in all critical areas of system development and growth.
Efficiency
To ensure consistency of documentation and to avoid the time and costs of unnecessary duplication, if at all possible, all franchise advice and consulting tasks should ideally be coordinated under one roof.
Be Cautious
Franchise Alliance warns to be cautious when dealing with franchise consultants who predict exactly what your fee structures, etc. should be during preliminary meetings and before the feasibility is completed; they would only be guessing, and with your future security in their hands.
Also be careful if franchise consultant proposals leverage their fees against your franchise sales. It could mean that the fees are excessive and it may only be a veiled attempt to save you money in the very short term.
Some consultants recommend very high fees, both Initial Franchise Fees and ongoing Service Fees for Franchisees to pay. This may seem attractive to you at first glance but, be careful, they must be calculated and balanced, otherwise your system may fail in the longer term and your reputation and investment then left in tatters. Your franchise package must be competitive in the 'Supermarket' of franchise opportunities. High fees are a barrier to the growth of your system, unless they can be justified.
At Franchise Alliance, we know the answers to your questions and look forward to the opportunity to meet and discuss your business and then together explore the potential it may hold for the long-term benefit of all in your system.
Read about buying a franchise and running a franchise.