Franchise consultants can play a critical role both in your decision to franchise and in your eventual franchise plan.

The first and most important guidance the franchise consultant should provide is objective advice about the viability of your business as a franchise and an assessment of whether franchising is the best option for you.

You should also assess:

• Can you work well with the consultant? You will be spending a lot of time with them and sharing your secrets of success. A good and trusting working relationship is very important.
• Will you be dealing with the consultant himself or will the work be delegated to others who are not as highly skilled?
• Find out and confirm what experience the consultant has had. Speak to people who have already franchised using the consultant’s advice?
• If the consultant is a member of the Franchise Council of Australia, they must comply with a strict code of practice. It would be interesting to find out why they would not be members of the peak body for franchising.
• Obtain a detailed written proposal for work which sets out clearly the scope of works, how much it will cost, a time frame for completion and when payments are required. Ask what other specialist work may need to be undertaken by other experts, such as legal, accounting, demographic, marketing, web page development etc. and understand if these costs are included.
• Get more than one proposal and understand the differences between them. The elements and principles of franchising do not differ much between businesses. It is the type and complexity of different businesses which create the differences in the work required. Cheapest is also not always best.
• Be careful to look whether there is an opportunity for termination as a result of non-performance or sub-standard performance. Payments should be structured more or less to coincide with work done, which would typically be over 5-6 months.

Be wary of business brokers disguising themselves as franchise consultants. Typically, they will request low fees to develop the franchise system, but require large success payments upon the sale of franchises. You are engaging a professional advisor, not an entrepreneur. In those circumstances the pressure will be on the broker to provide franchisee prospects who may not exactly fit into the franchise system, just to secure his income. Once the franchise system has been developed by professionals, you can investigate the use of brokers for the sale of franchises later.

Franchising is exciting, but it has to be done correctly in order to really maximise the potential of a company’s business opportunity and to comply with the Australian Franchising Code of Conduct.

For further information, contact Bill Lockett on 1300 658 311

or email: bill@franchisesystems.com.au