Start Franchise Business With Help From Franchise Consultants

Franchising means the way of doing business on the basis of other person’s philosophy of business. Here a franchisor, the owner grants the right to an investor or entrepreneur to market his companys goods or services to increase its brand visibility. For using the rights, the investor gives some percentage of gross monthly sales and a royalty fee to the franchisor. Some examples of today’s popular franchises are McDonald’s, Subway, Domino’s Pizza, and the Levis Store.

If you want to leverage the benefits of franchise business, take help from some experienced franchise consultant. Such consultants would help an investor to choose the best franchise business. In fact, today investors and entrepreneurs prefer to invest their money wisely under the guidance of a franchise consultant for various reasons, such as:

Evaluation of business scope

A franchise consultant first tries to understand the type of business that would suit an entrepreneur. A detailed analysis on the profile of the entrepreneur in lieu with their goals, skills, resources, experience and background help to get an idea about what are the best franchise opportunities for an entrepreneur.

Analysis of financial resources

To start a franchise business, an entrepreneur needs to make investments. A good consultant helps entrepreneurs to manage their capital in a more profitable manner. They will also guide on how much one should invest initially and from where loans and other financial helps can be arranged.

Help in making a choice

As such consultants are part of the franchise industry; they have better knowledge of the industry, their positive and negative aspects. Their contacts and expertise ensures that entrepreneurs invest in top franchise opportunities that they can run successfully.

Thorough research

With a franchise consultant, entrepreneurs get to know about the competitive analysis of the leading franchise companies. Suppose you want to invest in beauty industry then the consultant will provide you what leading companies are expecting from an emerging market or particular location.

Analysis of location

Knowing the markets from a consumer perspective and analyzing the growth allows the consultant to understand a location in a much different way as compared to a prospective franchisee. Plus, a consultant also has idea about what type of location will be beneficial for a particular type of business.

Meeting with existing franchisees

For starting a franchise business, it is essential to talk to some of the existing franchisees. But where can one get the details of the existing franchisees? Professional franchise consultants know exactly how to fix a meeting with existing franchisees. This definitely helps a new entrepreneur to understand the business in a better way.

Legal agreement

A consultant also helps an entrepreneur during the franchise agreement sign up process. They help you to understand the legal terms in a better way before the sign up and fees are transferred and the final agreement is signed.

Well, all these above mentioned points clearly points out that an experienced reputed franchise consultant would always ensure a better franchise deal.

Disadvantages Of Franchising Your Business

A franchise is a business arrangement in which the owner of a business (franchisor) grants certain rights of that business to another party (franchisee) in exchange for financial consideration. It is a common method of expanding a proven business, although it also has specific disadvantages. These primarily include the amount of preparation required to create a franchise, the reduction of income in the short term and the loss of control over the franchisees.


Franchising requires considerable preparation in order to have the best chance of success. You will need to run a pilot operation separately from your main business for a sufficient period to ensure you are using a sound business model. This model must be simple to learn, yet not so simple that competitors can easily copy it. The following problems are common when preparing a franchise:

The business produces a widely available product.
The franchisors are not capable of running the business according to your model.
You incur a moral obligation to ensure the franchisee is successful.
Insufficient support staff during the franchise’s startup period.

The business must generate sufficient profits for franchising to be worthwhile for both the franchisee and franchisor. A business with low gross profits is usually a poor choice for franchising, unless you are able to generate turnover quickly. The franchisees must earn sufficient income to pay the franchise fee to the franchisor, while still making a profit commensurate with their investment of time and money. The challenges in making a sufficient profit with a franchise include the following:

Franchisees must remain competitive while still making the franchise fee
A high franchise fee reduces the pool of possible franchisees.
The branches of a franchise generally produce a lower income than company-owned chain.
The growth of the franchise depends on the franchisor’s ability to attract the qualified franchisees.
A franchise requires startup capital until it begins making a profit.

The franchisor must give up a certain degree of control over the operation of the outlets. This creates the following requirements for the franchisor:

Conduct regular audits to ensure the franchisees do not underreport the receipts. This is essential, since the turnover determines the franchise fees.
Develop instruction manuals that describe your business model.
Engage in regular communcation with the franchisees to ensure they are following those instructions.
Allow franchisees to use the trademarks and business system of the parent company.

Franchising is most suitable for businesses with a high startup cost, such as Domino’s Pizza, Kentucky Fried Chicken and McDonalds. Small businesses typically have greater difficulty with duplicating their business models when they create franchises. This often means the franchisee spends too much time and money supporting the franchisors.