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Franchise business consulting is the process of giving professional advice and guidance to new and prospective franchise business owners. Franchise business consultants help prospective franchise owners understand and compare business opportunities; they inform them of the risks, investment requirements, and potential benefits. A franchise consultant may also provide support to new franchise owners, helping them through the early stages of business ownership. For example, a consultant may help to guide a new owner during his first year of operation.
People who work in franchise business consulting often have years of experience in the business world and dealing with franchises. They may also have significant education or skills to share with those in need of help. Often, franchise companies hire such people to help consumers interested in purchasing businesses. In such a case, the consulting service is typically provided free of charge for the consumer—the organizations selling franchises pay the consulting companies.
Franchise organizations may be willing to hire consultants for a few reasons. First, they are typically knowledgeable enough to help match prospective buyers with businesses that fit their skill levels, interests, and experience. This may mean franchise organizations spend less time screening potential franchisees who are in the beginning stages of considering business ownership. When a consultant answers the prospective franchisee's questions, he may contact the franchise company with more knowledge of the process and ready to purchase.
Franchise business consulting firms may offer a variety of services for prospective buyers. Some may help prospective buyers from the very beginning, informing them about what a franchise is and helping them to determine the best type of business for them. For example, a franchise consultant may help a prospective owner consider how much he wants to invest and where he can obtain the money he needs for start-up costs. A consultant may also help a prospective owner estimate how much money he’ll need to keep his business running efficiently until he starts to make a profit.
Using a franchise business consulting service may also help a prospective owner understand the ins and outs of a business he’s considering. While a franchise company typically provides documentation buyers can read, and some even provide preparatory classes, some details can be complex. For example, considering a franchise’s financial history is critical when buying a business, and a consultant can help a buyer analyze the figures. A consultant may also help him prepare for challenges inherent in the business he is considering and provide advice for avoiding common pitfalls.