Franchise advisors dare to be different
About 6 months ago, I was working with a really nice guy who had lost his job at NASA. He contacted me because he wanted franchise advice. (He had read an article that I had written on another website, and he told me that he liked my style.)
Whenever someone contacts me about my franchise advisory services, I send an email back confirming that I received their request for information, and ask them for a couple of good days and times for me to follow up via phone.
During our introductory call, (which is always free) I learned a little about Jim’s situation. He had been downsized from NASA, where he had been employed as an electrical engineer for the last 15 years. He wasn’t quite ready to retire-he felt that he had 10 more good work years in him. He wasn’t sure if he wanted to work for someone else again; he told me that he had always thought about going into business for himself, and that maybe this was his time to do just that.
He also told me that he had been contacted by a franchise “consultant,” who told him that he would help him,”find the right franchise to own,” at absolutely no cost to him. I told Jim that I was a ”recovering franchise consultant,” and shared two really important things with him;
1. Franchise “consultants,” and brokers, are paid large commissions by some franchise companies for introducing people like him to their concepts. (Payment comes after the franchise contract is signed and the franchise fee is paid by the person they referred.) The commissions are lucrative enough for these consultants to offer their matchmaking services for free. It’s a number’s game just like anything is in sales.
I also told Jim that franchise consultants/brokers only worked with a set number of franchise concepts; the ones that pay! For example, when I was a franchise consultant/broker, (same thing) I worked with around 150 different franchisors. To put that into perspective, there are currently 3,000 different franchise concepts to choose from. So, if you work with a broker, you’re only going to be exposed to a fraction of all the franchises that are available for you to learn about!
2. My services aren’t free. Now, I didn’t tell Jim that in a condescending way, mind you. I just had to educate him a little bit on how I worked.
I told him that my franchise advisory services are customized; everyone that’s interested in franchise ownership is coming at it from a different place, and also from a different stage in the process. Some prospective franchise owners are like Jim; they don’t really know a lot about franchising, so they need several sessions with me. (Via Skype and phone) These comprehensive sessions are at first educational; I teach these clients all about franchising, and then show them how to find out if it’s for them. After they’ve determined that they’re probably a fit for the business model of franchising, I show them how to evaluate their top work skills, and then teach them how (and where) to find opportunities in franchise ownership that could be a great match for their top skills.
But, (and this is the biggest difference between what I do, and what franchise brokers do) I don’t point them to any specific franchise opportunity. Instead, I show them how to find it on their own, but with me right by their side. A franchise broker only shows them franchises that the broker has formal contracts with, and would get a commission from.
When someone chooses to work with me, they know going in that I don’t receive any commissions for introducing them and/or placing them into a specific franchise.
“Deciding to purchase a franchise is a huge decision and the key to making the right decision is doing the proper research. I tried to do that research on my own and I while I learned a lot, I knew I didn’t have enough information. What’s worse, I didn’t know the right questions to ask. Then I met Joel Libava. He’s truly an expert in this field. If you are thinking of franchising, don’t do anything until you have talked to Joel.” – Susan K., Chicago, Illinois
Now if you’ll excuse me, I need to go find my raincoat. That’s because every franchise broker located in the US is going to start throwing tomatoes at me.
“Joel, you used to be a broker. You didn’t complain when you were getting those fat commission checks!”
“C’mon Joel! We’re just trying to make a living. Don’t be a jerk.”
“Just because you didn’t want to be a franchise consultant anymore doesn’t mean that what we do is wrong. Give us a break!”
I didn’t say that franchise consultants/franchise brokers are bad, and that you shouldn’t work with them. I just wanted to point out the differences. There are actually several franchise brokers who I’d recommend working with.
Barney Greenbaum- Columbus, Ohio
Marshall Reddy- Jacksonville, Florida
Todd Weiss- NY
Gordon Dupries- San Francisco
I wrote an entire chapter on franchise brokers and franchise consultants in my franchise book.
I hope you read it.
What’s your take on franchise brokers, franchise consultants, and franchise advisors?