3 Experts To Consider Hiring To Aid in Your Franchise Search

Anyone exploring franchise ownership has to evaluate thousands of potential business opportunities. The franchise discovery process is a labor-intensive journey, but ideally, one that allows entrepreneurs to identify the best possible business ownership opportunity for them.  Oftentimes, consulting professional advisors while undertaking this process can be beneficial—and can save you time and effort in the long term.

Here are three experts who can provide information and insights when you are considering whether to buy a franchise.

A Franchise Broker or Consultant

For the entrepreneur who doesn’t know where to start, working with a franchise broker or consultant is a great way to gain exposure to the industry. These franchising pros serve as facilitators between brands and franchise prospects, providing insights to candidates on the business ownership options available to them by factoring in their background, interests and desired investment levels. Consultants and brokers then match prospects with a manageable number of opportunities to consider. By identifying a select pool of franchise brands, these professionals streamline the discovery process considerably. 

It’s important to note, though, that these industry tour guides aren’t objective third-party outsiders with absolutely no personal interest in the matter. While their services come at no cost to franchise prospects, franchise brokers and consultants do receive a commission from franchisors in their networks to whom they deliver qualified prospects. This means that brokers and consultants might be more inclined to present prospects with the franchise brands they have existing relationships in place with, rather than the best opportunity for that individual. All of that being said, consultants and brokers still play an important role in many franchisee’s decisionmaking processes because of their exposure to the industry as a whole.  

A Business Financial Advisor

There are a few important considerations a franchise prospect needs to face before deciding to invest in a franchise opportunity. Understanding the financial commitments of buying and operating a franchise—from meeting the minimum net worth and liquidity requirements, to paying a franchise fee and percentage of royalties—is crucial to making an informed decision.

With this in mind, some key questions a franchise prospect needs to ask themselves early on in the discovery process include: What do I have available to invest? How much am I willing to borrow? What kinds of loans are available to me, and what do I need to do to qualify for them?

Enlisting the services of a business financial advisor to understand what’s realistic for them individually is an excellent means of mitigating risk and not getting too attached to a concept that’s outside of one’s price range.  

A Specialized Franchise Attorney

When a franchise prospect arrives at the point in the discovery process where they’ve engaged with a franchisor they’re particularly excited about, the franchise disclosure document (FDD) review process begins. At this stage of the discovery process, prospects should strongly consider consulting the expertise of a franchise attorney.

The FDD is a binding legal document and should be treated as such. A specialized franchise attorney can advise prospects on the most important sections of the document, including previous litigation (Item 3); renewal, termination, transfer and dispute resolution information (Item 17); and store closures over the last three years (Item 20).

This support is pivotal in determining whether a given franchisor is the right fit, which is why dedicating the necessary time and resources to go through the document with someone who has the expertise necessary to spot any red flags is paramount to making the most educated decision possible.