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It is
important to the future value of your business that you use a
consultant with experience; they will need to have the appropriate
sector qualifications; and of course a proven history of success.
One must recognise that quality and professional services
with integrity do come at a price. Franchising your business
is not going to be cheap, but it is a worthwhile and valuable
investment.
Of course,
drafting a Franchise Agreement requires more than just legal
qualifications. The operational documents need more expertise
than a technical author alone can provide. A franchise
feasibility study is of course needed before any of the initial or
ongoing fees can be determined or documents prepared.
Any hitch in
this development process could jeopardise the successful completion
and implementation of a franchise program. At best, the
"do it yourself" approach is likely to be slower and,
believe it or not, usually more expensive in the long term, than
getting help from a Franchise Consultant. You should factor
your time into the equation as well as the potential for lost
opportunities due to delays in completion. Don't forget,
whilst you are developing your own franchise system you are not
focussing on the real issue…improving and growing your
business.
Consultant
Qualifications
In assessing
the qualifications of a consulting firm, several criteria should be
examined closely.
Expertise
A franchise
consulting firm requires a strong blend of expertise in the
strategic, financial and operational areas of franchise planning.
Ideally they should have direct experience as a Franchisor to fully
appreciate the road ahead for you, and advise you accordingly.
Experience as a Franchisee is also very valuable and not to
be underrated. Ideally too, your consultant should hold the
recognised peak qualifications for the franchise sector, those
being the Australian Franchise Executive Certificate (AFE), and
perhaps the Australian Franchise Management (AFM)
qualification.
It is not
simply a matter of having 'some experience' and hanging up a
sign…anyone can do that!
A Track
Record
The firm
should be able to show experience and success in providing
consulting services over a long period, and in Australia.
They should be willing to publish a list of satisfied
clients, both large and small and provide recent client
testimonials to support their representations to you.
Value for
money
The firm
should be able to provide a competitive quotation for the specific
services required, and a realistic estimate of any other costs that
the Franchisor may incur, before they start. Don't just look
for the cheapest; you need the best that you can afford in the long
term, not just for today. Some preliminary investigative work
by the consultant may be necessary prior to a complete quotation
being provided.
Services
The firm
should be capable of providing most, if not all, of the services
required by a Franchisor in the first year and beyond. It
should have the capability to serve both new and established
franchise companies in all critical areas of system development and
growth.
Efficiency
To ensure
consistency of documentation and to avoid the time and costs of
unnecessary duplication, if at all possible, all franchise
consulting tasks should ideally be coordinated under one
roof.
Be
Cautious
Be cautious
when dealing with consultants who predict exactly what your fee
structures, etc. should be during preliminary meetings and before
the feasibility is completed; they would only be guessing, and with
your future security in their hands.
Also be
careful if consultant proposals leverage their fees against your
franchise sales. It could mean that the fees are excessive
and it may only be a veiled attempt to save you money in the very
short term.
Some
consultants recommend very high fees, both Initial Franchise Fees
and ongoing Service Fees for Franchisees to pay. This may
seem attractive to you at first glance but, be careful, they must
be calculated and balanced, otherwise your system may fail in the
longer term and your reputation and investment then left in
tatters. Your franchise package must be competitive in the
'Supermarket' of franchise opportunities. High fees are a
barrier to the growth of your system, unless they can be
justified.
At Franchise
Alliance, we know the answers to your questions and look forward to
the opportunity to meet and discuss your business and then together
explore the potential it may hold for the long-term benefit of all
in your system.
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