There are many advantages to getting expert advice from a professional who knows the inner workings of an industry. In fact, just having help with interpreting the language of an industry, in this case terms like Franchisees, Franchisors, Multi-Unit, Royalty Payments, Franchise Agreements, Franchise Terms and Renewal Periods, can be of tremendous assistance.
Many of you wouldn’t buy a property without the assistance of professionals such as real estate agents, attorneys, surveyors or accountants; it stands to good reason that you shouldn’t buy into a franchise without first utilising the skills, resources and experiences of professional advisors or specialists in the franchise sector.
Below you will find a list of the various professional advisors that are found in the franchise industry and what part of the process they can assist you with:
Franchise Attorneys are specialists in franchise law and as such they can guide you through Franchise Agreements, Franchise Renewals, Franchisor disputes and more.
As you move closer to joining a franchise you will be provided with a copy of a Franchise Agreement for you to review. The Franchise Agreement essentially sets out the terms of the franchisor-franchisee relationship and puts the franchise offering into legal format. This is when an independent Franchise Attorney will come in. They will review the Franchise Agreement on your behalf and provide you with a full report that details each section, highlights any concerns and makes clear the key information you need to know before making an informed decision.
Franchise Attorneys will usually follow-up with a one-to-one telephone call to answer all your questions, plus email correspondence for any questions that later come to mind. It’s vital when reviewing franchise related contracts that you work with a Franchise Attorney as they will have specialist knowledge of this space.
There have been many negative cases where a non-Franchise Attorney has come in and provided poor advise, simply because they don’t understand the inner workings of the franchise industry.
If you are coming from any form of employment, especially from the world of corporate employment, then it’s a good probability that you have experience working with recruiters, particularly executive recruiters (otherwise known as head hunters).
Franchise Search Consultants operate in a very similar way to executive recruiters and can be an invaluable source of guidance and information when exploring franchising as a possible next step. They are great at evaluating your potential, helping you to effectively conduct a full personal analysis, then navigating you around the franchise industry, helping you to identify the most suitable franchises for you.
After supplying you with research material and inside information, they introduce you to each franchise at the appropriate level of the business, allowing you to circumvent franchise sales employees and speak directly with the leadership.
Franchise Search Consultants generally don’t charge for their services, as they are usually compensated by the franchisor when someone they introduce joins a franchise.
While not as necessary as Franchise Attorneys, a good Franchise Accountant will understand the accounting principles associated with franchising and be able to advise accordingly. The primary difference between franchise and non-franchise accounting is simply the additional fees associated with franchising, largely the initial franchise fee and on-going royalty. Good Franchise Accountants will typically have relationships with franchisors and thus they may be able to advise on matters that you are not quite clear on.
Franchise Lenders (Banks And Specialist Lenders)
Franchising is looked very favourably upon by lenders, thanks to its repeatable business model and validation through existing franchisees. That’s why lenders will loan up to seventy percent of the funding required, including working capital to get you started.
A selection of the main stream banks has specialist franchise teams within them that are solely dedicated to working with franchisors and franchisees. They know the inner workings of the franchise industry and are well placed to provide you with franchise specific loans and guidance. To loan you money to purchase a franchise, the franchisor must first be vetted by the bank, which adds an extra layer of security from your part.
You will also find specialist lenders within the franchise space that loan specifically to franchisees. They too have a strong understanding of the dynamics of franchising and can be a major source of advice as well as finance.
Be wary of borrowing from lenders who are not specialised in franchising. They will have limited knowledge of the inner workings of the franchise sector and can greatly impede your progress.