What specific services does a Franchise Consultant offer to their clients? How do they differ from Franchise Brokers?
This is an excellent question, and one that bears detail. The term “franchise consultant” is used and misused because it has different meanings. To begin with, there are basically two sides to franchising: those being the franchisee side and the franchisor side.
First, let’s look at the franchisee. Most “consultants” that the prospective franchisee run into on the internet are actually paid a commission (or fee) by a franchisor “if and when” their client buys a franchise that they “represent”. There is nothing legally wrong with the arrangement, but the unfortunate fact is that many buyers trust in the “consultant” and do not consider the fact that the consultant is going to be paid only if a purchase is made. This can create conflicts of interest. I have spoken out against this practice, but only in the sense that the client should be told clearly how the arrangement works. I don’t sell franchises, so when I consult with a buyer it is on a “for fee” basis and I am looking out for their best interests. BibbyGroup.com describes the intricacies of the process in detail.
Second, we have the franchisor side. When franchising a business, it is almost impossible to do a credible job without the aid of a “quality” franchise consultant and a franchise attorney. There are good franchise consultants out there, but the business owner must ensure that they are not being “sold” on the idea of franchising their business. Again, BibbyGroup.com does an excellent job of explaining the entire process (and the pitfalls that a prospective franchisor faces).