Investing in a franchise, or buying any business for that fact, is very similar to buying a property. It often requires you to put down a deposit, raise finance to purchase it and then keep the property maintained to the standard that you want. You then have the option to sell it down the line, or maybe pass it on to children and family members.
However, the primary difference between buying a property and buying a business, whether that be a franchise or an independent business, is that with a property you get bricks ‘n’ mortar, while with a business and, particularly with a franchise, you tend to get intellectual property. The difference is huge and if it all goes wrong, you may be left with nothing.
The same way as you wouldn’t purchase a property without consulting with real estate agents, attorneys, surveyors and financial advisors, it stands for good reason that you shouldn’t buy into a franchise without first utilising the skills, resources and experiences of professional advisors who are specialists in the franchise sector. One these professionals advisors is a Franchise Search Consultant, or in other words, an executive recruiter that specialises in franchising.
A Franchise Search Consultant plays a similar role to that of a ‘head hunter’ whereby they work closely with you to understand your background, experience and aspirations, then use their specialist knowledge to match you with the franchises where you have the highest potential of working successfully together.
In many cases, the brands and businesses that a Franchise Search Consultant matches you up with will be the last thing you thought of, but they often turn out to be the best matched opportunities of them all!
The area of Franchise Search Consultants has grown rapidly over the years, largely because both the franchisor and you, as the prospective franchisee, get so much value from working with such specialists.
From the franchisors perspective, less than one in a hundred people who contact them will end up becoming a franchisee, however the franchisor still has to cover the costs and overheads of the staff who will deal with the remaining 99% of enquiries.
As I’m sure you can imagine, this is a lot of work. At the same time, prospective franchisees are often navigating a playing field that they know nothing about and can very quickly get tired and lost. They can also find the process of interacting with franchisors slow and frustrating, occasionally taking them a long time to get the information that they want at which point they’ve lost interest.
A Franchise Search Consultant directly intersects both processes and marries them together in an almost harmonious fashion. They first spend time understanding who you are, your background and experience, where you are in your life right now and what your goals are for the future.
Then, they will identify the franchises that best meet your experiences and goals, taking you through them at a much deeper level than you could if you were researching independently.
If you decided that you wanted to find out more and were ready to engage in conversation, they would then introduce you to the senior leadership of the franchise, circumventing the lower level, process driven stages.
Franchise Search Consultants typically play an ongoing advisory role, helping you to prepare for meetings, connecting you with independent adviser’s, such as a franchise attorney to review any franchise agreements, then assist along the due diligence stage where you will talking with existing franchisees.
From the franchisors perspective, they know that roughly one in eight referrals from a Franchise Search Consultant will end up becoming a franchisee, therefore they spend extra time with them and really ensure that they have all they need to make a proper buying decision.
Pros and Cons of working with a Franchise Search Consultant
One of the biggest benefits to working with a Franchise Search Consultant is time. Remember, it takes 30 hours to explore a single franchise opportunity in detail… you want to make sure that this time is well spent, even if you don’t end up investing in that specific franchise.
A good Franchise Search Consultant will not waste your time with non-vetted, unproven franchise concepts – they will only be working with pre-screened franchises that have a good management and support structure in place and who have a successful track record of franchising.
Another understated benefit of working with a Franchise Search Consultant is that the service they provide is typically free of charge. As with most recruitment models, the Franchise Search Consultant will receive a ‘success fee’ for on any successful introductions that they make that result in a prospective franchisee joining a franchise. In order for this to happen, the Franchise Search Consultant must make good matches between prospective franchisees and franchisors.
On the downside, a Franchise Search Consultant will not work with every single franchise in the marketplace. Bog franchise brands, such as McDonalds and Domino’s Pizza, will choose not to work with a Franchise Search Consultant because they can sustain the overheads of recruiting prospective franchisees that contact them directly.
In our experience, the best Franchise Search Consultants are:
- Great listeners.
- Experienced in business ownership, executive search and franchising.
- Have your best interests in mind – always.
- Are open and honest about franchising and how suitable it is for you.
Whether you choose to research franchising independently, or with the help of a Franchise Search Consultant, it all comes down to your personal preference.
An independent approach is viable but can be time consuming, confusing and easily result in nothing happening. Whereas the process with a Franchise Search Consultant will be streamlined, efficient and often provide a level of detail that you will struggle to get anywhere else.
At Knight Franchises, we take great care in helping our clients understand the franchise market in full, often giving them true insights into the franchise industry and specific franchise brands – information they just can’t get anywhere else.
Regardless of your approach, the key is to identifing the franchises that appear to be the best match for you and then work your way through the Franchise Discovery Process to establish whether you do, in fact, have the abilities to make this franchise a success and that this franchisor is the right company to be joining forces with.