I hope you were able to learn a lot from the information I shared about franchise consultants in the 1st part of this article.
But what happens when you work with a franchise consultant? I’m going to show you, step-by-step.
That’s because it’s important for you to know what you’ll experience if you decide to go this route. The reason: The amount of money you may end up investing if you become the owner of a franchise business could be substantial.
With that in mind, what follows is the exact process that nearly every franchise consultant uses to match you to a franchise they represent.
What Happens When You Work With A Franchise Consultant?
If you want to know how today’s franchise consultants work, follow along. I’m going to show you everything you’ll experience, step-by-step
The Initial Call
In order to get contacted by a franchise consultant, you probably:
- Filled out a form on a franchise or business-related website
- Attended a seminar or a franchise show
- Were referred to one
In any case, here’s what happens next.
Nine times out of ten, you’ll receive a welcome email from the franchise consultant. (Maybe even a phone call-followed by an email.)
When you get the welcome email, expect a “Thank you for contacting me” sentence, followed by:
- A brief biography* of the consultant
- An explanation of what he does
- Next steps
- A questionnaire
And maybe something else, like pointing you to an article that explains franchising. (That link goes to an informative article I wrote for CNBC.com as part of my book launch. You should read it. )
*About the franchise consultant’s biography: Today’s franchise consultants don’t necessarily have a background in franchising. On the contrary, their professional backgrounds vary-a lot.
For example, a franchise consultant may have been a downsized corporate manager or executive who responded to a “Make Money Helping Entrepreneurs” type of advertisement.
Should A Franchise Consultant Have A Franchise Background?
I don’t know about you, but if I was potentially investing $150,000 or more into a franchise business, and decided to use the services of a franchise “consultant,” I would certainly expect said consultant to be someone from the world of franchising.
Be that as it may, you need to know that if you end up working with a franchise consultant, chances are they ain’t* gonna have a background in franchising.
*Having said that, there are a lot of successful franchise consultants that did come from non-franchise industries.
And by successful, I mean they make a lot of money…as in $250,000, even $350,000 a year-or more!
Tip: Just because a franchise consultant has made a lot of franchise matches, which equals a lot of money made for her own pocket, it doesn’t mean that the candidates they placed are successful franchise owners. Heck, the candidates they placed into franchises may actually be out of business already, and in a bad place, financially. It’s almost impossible to know. It’s generally not tracked very well.
The questionnaire you receive (via email) from your franchise consultant, is an important tool. For him.
That’s because you’ll be asked to share a lot of very personal things about yourself. Things your consultant will use to match you to franchises in his stable.
For the most part, the questionnaires in use today are good. They can really get you thinking about yourself, and the types of businesses you may want to look into.
In short, the questionnaire you’ll be asked to fill out will include questions about your employment history, your strengths and weaknesses, likes/dislikes, and most importantly, there will be a pretty detailed section that asks you to fill in information about your finances. Very specific things about your finances.
For instance, you’ll be asked what your net worth is, along with how much money you’d be willing to invest in a franchise-if you find the right one.
Will You Have To Disclose Your Financials?
Warning! You may feel uncomfortable about revealing your financial situation. If that’s the case, here’s what you can do to (possibly) feel a little more comfortable about sharing your financial information with someone who is a total stranger.
Do This: Use Google, Bing or DuckDuckGo, and type in the name of your franchise consultant. See what comes up.
Then…and this suggestion is sure to piss off every franchise consultant in the United States, perform another internet search using the consultant’s name-but add the word “fraud” after it. (You can use the word “scam,” too.)
Again, see what comes up.
Bonus: Don’t be afraid to use the name of the franchise consultant’s organization* in your search, too.
*Most franchise consultants belong to some type of organization-and some of them are franchises themselves. Here are the names of some of the larger franchise consultant groups.
Now, in my experience, most franchise consultants are fraud-free. But just like in any industry, there are a few bad apples. So make sure you do a background check of the consultant before you start working with him. Just use your favorite search engine and use my ideas. You can even use some of the ideas contained in this Digital Trends article on how to run a totally-free background check.
Recommended Read: This Entrepreneur.com article about good/bad franchise consultants.
Franchise Matching Time
This is when the fun begins, because it’s franchise matching time. It’s when you’re going to be “matched” to franchise opportunities that your consultant feels are right for you.
But, how does she figure out what franchises to present to you for possible matches?
Answer: By examining the answers you gave on the questionnaire she asked you to fill out. In particular, she’ll be looking at the following two things.
1. Your financial information. She needs to make sure you have enough* money to buy a franchise.
*In my world, people need to have a minimum net worth of $
300,000. (I’m changing that amount to $350,000, because $300,000 doesn’t really cut it anymore.)
In addition, $50,000 of your net worth must be liquid.
Important: Make sure you calculate your net worth correctly. (A lot of people mess up their calculations.)
2. Your personal traits/strengths
The questionnaire you fill out almost always includes a place for you to write down your:
- Business strengths
- Personal abilities
- Personal traits
Examples Of Personal Traits
For instance, you may be asked to look at a list of personal traits, and circle the ones you feel best describe you.
The reason you’re asked to reveal these things is so your franchise consultant can start formulating ideas on the types of franchises you may be a fit with.
The same is true for what you reveal your business strengths to be.
Examples of Business Strengths
The things you’re good at, business-wise, can help determine the types of franchise opportunities you should be investigating. That’s why there’s going to be a spot on the questionnaire for you to share what you’re good at in business.
Look at this list:
- Employee management
Are you highly-skilled at any of those things?
No Employees Needed With This Senior Care Franchise Opportunity
In addition, you may be asked what your best personal abilities are.
(For example, are you good at building things, writing, acting etc.)
If you’d like to be your own franchise matchmaker, my online course, “How To Buy A Profitable Franchise” teaches you how…and a lot more. It’s actually not very difficult. Click the box below to see what’s included in it-and find out how taking the course will help you lower your risk and choose a profitable franchise.
Aside from your consultant looking at your financial qualifications, personal traits and business skills, there are a few more items she’ll be looking at.
For example, one of the things included in the questionnaire is an area to fill out your job history. (Kind of like when you apply for a new job.)
It’s there because she wants to see what your roles and responsibilities have been, so she can present the right franchises to you. Let me show you what I mean.
Let’s say you’re an accountant who was was recently
let go fired from an Inc 5000 company.
You’re role had to do with auditing and taxes. You had your own office, and were pretty much on your own with no employees under you.
A good franchise consultant would not present you with a franchise opportunity that needed 35 full-time employees. (Because you don’t have supervisory experience.) But, an average or below-average franchise consultant might.
Another thing your consultant will want to know has to do with your immediate family. Specifically, “Is your spouse/significant other supportive of your idea?”
Tip: If your significant other/spouse/partner is not fully on-board with your idea of becoming your own boss through franchising, you’re going to have to seriously up your sales game.
Read, “Honey, I’m Thinking Of Buying A Franchise,” to see what I mean and to have a chuckle.
Another thing your franchise consultant will look at is your time-frame for getting into business.
I guarantee there will be a question on the questionnaire that asks when you’d like to buy a franchise. It will look like this.
How Soon Would You Like To Be In Business?
Within 3 months
Within 6 months
Within 12 months
(Obviously, you couldn’t literally “check one” above. But, on the questionnaire you can.)
Hot. Warm. Not.
From a franchise consultants’ point of view, if you checked “within 3 months,” you’re considered a “hot” candidate. She’ll focus most of her energy on you, since in her mind you’re ready to buy a franchise.
If you checked “within 6 months,” you’re a “warm” candidate. Your consultant will put a good amount of energy towards you-but only if you’re showing enough interest in the franchise opportunities she’s presented you.
If you’re looking to buy a franchise “within 12 months,” she may try to talk you out of not working with her.
That’s because in the world of franchise consulting, you’re not considered a good candidate.
What you are considered is a “tire-kicker.” That means you’re “curious” enough about franchising to “look at a few franchises,” but you’re probably not at the stage where you are serious about investing money in a business.
To put it bluntly, when someone works on a 100% commission basis, they’re only going to spend time with people who they feel can make them money.
So, in this case, if your time-frame for getting into business is too far in the future, you should just search for franchise opportunities on your own.
Another option would be to work with someone who doesn’t rely on commissions to make money, so he can go at whatever pace you’re comfortable with. Like this guy
To summarize, your franchise consultant will be taking a deep-dive into the answers you gave on the questionnaire. It realy is a powerful tool for them, because in their eyes-it helps them qualify you or disqualify you. It helps them decide if it’s worth their time to work with you or not.
Because time is money.
The Franchise Matching Phone Call
As long as your franchise consultant feels you’re qualified-financially, along with some or most of the other things I shared with you, he’ll schedule the next phone call.
During this call, he’ll discuss the answers you gave on the questionnaire, and explain how his process works.
Then he’ll present a few* franchise opportunities he feels are a good fit for you.
*I’m not sure why this is, but 9 times out of 10, you’ll be presented with exactly 3 franchise opportunities.
Franchise Consultant Secret #1: The franchise opportunities he presents to you were picked out well before this call. He already knows how much money you have, what you’re good at, along with other assorted things you shared. It’s all part of his plan.
His plan to match you to a franchise he can get paid a commission on.
But know this: He can always come up with other franchises spur of the moment, especially if you’ve said no to the 3 franchises he presented.
Franchise Consultant Secret #2: One way franchise consultants entice you into working with them is by throwing big numbers at you.
In this case, I’m referring to the number of franchises they work with.
200 Different Franchise Opportunities
“Maureen, not only are my services free, but when you work with me you have a lot of choices. That’s because I work with over 200 different franchisors!”
Important: There are 3,000+ different franchise opportunities offered. A franchise consultant works with less than 10% of them!
On the surface, this sounds great to Maureen-the candidate. But in reality, 9 times out of 10, a franchise consultant only presents 15-20 opportunities out of the 100-200 he has formal contracts with.
“But why would a franchise consultant only focus on a small number of franchises, Joel? It makes no sense.”
Sure it does. That’s because today’s franchise consultants are trained to have a list of “go-to” franchise opportunities at the ready.
Basically, they’re instructed to memorize the details of 15-20 franchise opportunities…to get to know 20 franchise opportunities really, really well.
Because once they have those 20 or so franchises down pat, they can present them in the best light…make them sound very attractive.
Attractive enough for you to agree to get contacted by the franchise sales team at franchise headquarters.
In addition, they’re taught to choose a few franchise businesses from each franchise sector. For example, 3 retail franchise opportunities, 3 home services franchises, 2 fitness franchises, 3 senior care franchises, and so on. They’re also trained to have franchises available that have low, medium, and higher investments-if possible. That way no matter what their candidate’s financial situation is, they’ll have franchise opportunities to offer them. And you know why, right?
(So they can increase their chances of making a match-providing them with a sizable commission.)
This is a perfect time for you to learn how I work with people who are interested in possibly buying a franchise.
Because what I do is vastly different compared to what a franchise consultant does.
Now, let’s continue with the next step in the process.
Interested In Any Of The Franchises Presented?
After your consultant has presented 3 franchises, he’ll ask you if you’re interested in any of them. If so, he’ll suggest that you agree to getting contacted by someone from franchise headquarters to “learn more.”
Your possible answers:
“Yes, I’m interested in learning more about 1-800-Blah-Blah Blah, but the other two aren’t doing it for me.”
“I definitely want to know more about 1-800-Blah-Blah-Blah, and The Cleanup Pros. Please tell them to call me”
“No, I’m not interested in any of the franchises you recommended. What other ones can you show me?”
If you’re interested in one or more of the franchises he presented, your consultant will send your information over to the franchisor, and he’ll give you the name of the person from franchise headquarters who’ll be calling you.* In most cases, this person’s title will be Franchise Development Representative, or Director of Franchise Development.
Tip: You need to know that whatever the title of the person you’ll be working with at franchise headquarters is, he or she is a salesperson. And guess what: This person is also getting paid a commission if you buy the franchise.
*Important: When you work with a franchise consultant, you aren’t allowed to contact the franchisors directly. Instead, the franchisors must contact you.
That’s because in order for the franchise consultant to get paid for referring you to a particular franchise, he needs to officially “register” you with them. In other words, there must be proof that he referred you to them. (A paper trail.)
Franchise Consultants Are Paranoid
I’m not kidding. They are.
If you tell your franchise consultant something like this: “Bob, I want to think about your ideas for a few days, and then I’ll just call the franchisors myself if I’m interested,” expect to get serious resistance from Bob. (Your franchise consultant.)
That’s because Bob is a very paranoid guy. He’s been taught to always be fearful of candidates who attempt to go around him and contact his franchisors themselves. He knows if that happens, and a candidate buys the franchise the consultant represents, he won’t get a commission check. And that would make Bob very angry.
(Imagine how angry you would be if you missed out on a $20,000 payday, simply because a candidate went around you and contacted the franchisor you represent, himself!)
Franchise Consultant Secret #3: A lot of franchise consultants register their candidates with every franchise they presented to them, even if their candidate showed no interest-just to cover themselves. However, doing so can lead to problems.
For example, you (his candidate) could end up getting an email or a phone call from a franchisor you’re not interested in hearing from.
Now, in most cases, this doesn’t happen on purpose. It’s simply a breakdown in communications. (Or in Led Zeppelin speak, a “Communication Breakdown.”)
What sometimes happens is franchise headquarters receives your contact information from the consultant, and the franchise development department gets a ping. So they contact you.
If that ever happens to you, just tell them it was a mistake, and if you decide you’d like to learn more about their franchise opportunity in the future, you’ll let them now. (And bitch your franchise consultant out.)
Now, let’s get back to the topic at hand; your non-interest in the franchises you’ve been presented with.
When Your Franchise Consultant Presents Franchises You Don’t Like
Just because a franchise consultant presents franchise opportunities he feels are good ones for you, it doesn’t necessarily mean they are.
Remember: This is your money we’re talking about. It’s your life. Your future. This isn’t the time to say “Yes I’m interested” in a franchise opportunity he recommends if you’re not. Please tell him you’re not interested in his idea-or ideas. Your consultant will get over it. Really.
In other words, if you decide to work with a franchise consultant, go in with an open mind…but don’t agree to get contacted by representatives of franchise opportunities you’re not in the least bit interested in. Let’s continue…
If you’re not interested in any of the franchises he presented, one of these things usually happens:
- Your franchise consultant will suggest another franchise or two.
- You’ll mutually decide to take a breather and have another conversation in a few days.
- You’ll end things with him-because of your disappointment, and try to find the right franchise opportunity on your own.
Let’s talk about #3.
How To Anger A Franchise Consultant
Generally speaking, today’s franchise consultants are fairly reasonable…and pretty professional.
That is until you mess with their generous paydays.
As an example, let’s say the franchise consultant in question just spent an hour and a half with you. (For free.)
In your case, she presented 5 different franchise opportunities to you. (Let’s make it 6, because she came up with a last-minute idea.) But the thing is, you liked exactly none of them.
As a result, you decided (in your own mind) to start looking at franchise opportunities on your own, since your consultant couldn’t come up with any good ideas for you. (You figure you had nothing to lose since her services were free, anyway.)
So, after you share your dissatisfaction with her, you’ll probably hear something like this:
“I’m sorry you weren’t interested in any of the franchises I showed you. Maybe your expectations are unrealistic. I’ve found that some of my candidates think they’ll hear about some kind of perfect franchise opportunity from me-and they’ll be super-excited to get more information from the franchise rep. But, it usually doesn’t happen that way”
“Maybe we need to go back to the drawing board, and begin the process again.”
“Maybe a franchise isn’t a good idea for you after all.”
That last one is called a “takeaway.”
A takeaway is a sales technique in which the salesperson “takes away” the product or service that was presented in order to get a reaction from the potential buyer. In this case the buyer-you, may say something like:
“No, no…I’m still interested in finding a franchise to buy. I just can’t get excited about the ones you showed me.”
If you say that, your consultant will definitely start coming up with more franchise opportunities for you to consider. Because commission.
See how that works?
Important: Just because you’ve decided to work with a franchise consultant, it doesn’t mean that you can’t look at other franchise opportunities on your own. After all, it’ your money you’re thinking of investing.
The Next Calls With The Franchise Consultant
In contrast, let’s say you liked two of the franchise opportunities you were presented with, and you’ve agreed to get contacted by the franchise reps.
Let’s also say that the conversation (or conversations) you’ve had with those two franchise development reps went well, and they’ve laid laid down what the next steps in the process are going to be. These steps may include:
- A webinar to attend
- Receiving the Franchise Disclosure Document (FDD)
- Participation in a conference call with franchisees
- Weekly Q & A calls (with your franchise rep)
- Financing options
- Franchisee calls (you’ll be making those)
- Discovery Day invite
- Franchise contract
- Decision Day
It’s a lot, I know.
But, if you do these things one step at a time, and you’ve been gaining knowledge along the way, you’ll be in an excellent position to make a yes or no decision on the franchise opportunity you ultimately want to invest in.
At this point in the process, you’re getting close to making a yes or no decision on the franchise you’ve been investigating. That’s why the next few calls you have with your franchise consultant will be one’s of persuasion.
To put it differently, your consultant will be attempting to persuade you to buy the franchise you’ve chosen.
Now, some franchise consultants do this gently, and some will put you on the spot.
I’ve found that the way they do it it depends on a couple of things:
A. The franchise consultants’ personality.
If your consultant is laid-back, and has given you a lot of latitude during the process, he’ll be gentle in his persuasion techniques.
On the other hand, if she has an aggressive personality, and has been putting a lot of expectations on you during the process, i.e. really trying to control it, she’s going to go in for the close, hard. She’s going to press you to make a decision, and she’s not going to let things stay in limbo for very long.
B. Your geographical area.
How is business transacted in your area?
As an example, let’s say you live in New Jersey, and your franchise consultant was born and raised there.
If that’s the case, you know that business transactions are done in a very intense, aggressive way.
Based on that fact, your franchise consultant is going to try to get you to buy the franchise you’re interested in a way that’s not even a cousin of “subtle.” And he’s going to follow-up a lot when you’re in decision-mode. In other words, you won’t be left dangling-if you get my drift.
In contrast, if you live in Montana or Idaho, the opposite may be true.
Your franchise consultant will (generally) give you a lot of rope. She won’t push real hard, and the process will be allowed to take its natural course.
In other words, she’s not going to try to close you too hard.
Coming Up: Part 3
In Part 3 of this series on franchise consultants, and what happens when you work with them, I’m doing surgery.
Namely, I’m going inside the head of a franchise consultant.
Would you like to know why?
Because if you end up working with a franchise consultant, it’s important to know what he’s thinking-along with what he’s going to do to get you to sign the franchise agreement-and send in your $$$$ check for the upfront franchise fee.
So He Can Reach His Financial Goals
What? HIS goals?
Tip: Type in your email below so you don’t miss Part 3. It’s going to be a doozy.