Last week I discussed using franchise brokers and consultants to find opportunities in franchise ownership. As promised, here is a list of guidelines you should follow when choosing a franchise consultant/broker to work with:
The Big Ten
1. Find out how many years this person has been a franchise consultant/broker. Lots of “newbies” have entered the business in the past 2 years.
2. Ask them if they have previous experience in the franchise industry, or if they have ever put their own money into a franchise or non-franchise business of their own.
3. Find out how many newspaper, magazine, or online franchise articles they have been quoted in. Also, you can ask them if they have ever been interviewed by local or national news organizations.
4. Ask them to share any franchise articles or whitepapers they have authored, and that have actually been published.
5. Find out if they are part of a franchise that just so happens to “sell” franchises. This is important, because you may find yourself being pitched on buying their own franchise! Besides being a serious conflict of interest, what are the chances of you being interested in becoming a franchise consultant/broker in a very crowded field? Also, the paydays tend to be rather large for these folks that sell their own franchises, so the incentive is certainly there for them to push them.
6. Ask them for a list of at least 20 people who are in franchised businesses of their own, directly as a result of working with them as a franchise consultant-broker. Call them, and see if they were happy with the results.
7. Find out if they know at least 3 attorneys that specialize in franchising who will vouch for their character?
8. Ask them if they hold face to face meetings in their own office. Find out if they even have an office. More and more folks are opting for home based offices, but some people really like the fact that their franchise consultant/broker leases an office. Be careful. A lot of the newer franchise consultant/brokers work from home via phone and internet. You may live in Charlotte, North Carolina. You may be getting called for a franchise consultant/broker from Atlanta, Ga. What are the chances that a franchise consultant/broker from Atlanta could do as good of a job as a local resident who is a franchise consultant/broker that actually lives and works in your city.
9.Is this their only business? Is this a full time commitment? Or, is this an add-on business to something they already do?
10. Find out how deep their local network is. Ask around. Are they well known? Are they considered ethical? Get references from folks that have not worked with them in a franchise search.
The most important thing to find out from a franchise consultant-broker is this: