What My Franchise Consultant Did Not Tell Me

A good Franchise Consultants can be very helpful in assisting you with finding the type of franchise you might be interested in purchasing and with making you aware of and matching you with opportunities that are congruent with the amount of capital you have available or can acquire to invest. One of the fist things they will or should do is to find out what type of business or industry you are interested in (e.g. restaurant, computer service, shipping and supply, etc.), inquire about your preferred type of ownership (e.g. owner operators/active, absentee or passive), assist you with determining your net worth and to understand how much money you have available for an initial franchise investment. This is information that the consultant must know in order to accurately and effectively find opportunities that best suits you and your financial/capital wherewithal. Most consultants have a number of franchises that they work to find candidates for and they will use the information that you provide to identify and present to you companies that match your criteria and companies they think you will be interested in.

The first caveat you should be aware of is that the majority of consultants will only present to you those franchises that fall under their umbrella. You see, the majority of consultants provide their services to you for free because they earn and are paid a commission per an agreement and/or arrangement that they have in place with the franchises they represent. This arrangement reveals an obvious conflict of interest (from the franchise investor perspective) that you should be aware of. Most Franchise Consultants providing free consulting services are really third party sales men or women working for the franchises they represent. Therefore, there is a strong possibility that your Franchise Consultant may not voluntarily make you aware of any potential negative information or publicity on the companies they present to you.

Knowing this, you should now fully understand that the onus of fully vetting any and all franchise or business opportunities that you are considering is totally your responsibility. Don’t assume that the companies you have been presented are all good companies just because they were presented by a Franchise Consultant.

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