A franchise business consultant plays a vital role in the franchise business industry. Read on to know about how he can be helpful to the franchise fraternity.
As per KPMG India Pvt Ltd India’s franchising industry is expected to quadruple in volume in the next five years, accounting for almost 4 per cent of India’s gross domestic product (GDP) in 2017 and is projected to provide almost 11 million employment opportunities by 2017. However, there is lack of standardised business practices in India which threaten the franchise fraternity for adverse results. Therefore the role of a franchise consultant becomes more important for franchisor and franchisee; they both need him for achieving growth systematically and sustain it for long.
Who is a franchise consultant? What he does? How he helps?
A franchise consultant is a qualified candidate who consults entrepreneurs (franchisors and franchisees) to buy or sell a franchise business. Significantly, he/she works like a counsellor for the franchise business community. He guides franchisors through the well planned brand promotion practices and help to follow an effective franchise business model for expansion. Besides, franchisees can uncover promising business opportunities under the guidance of franchise consultants. For example, Francorp Advisors, a leading franchise consultancy is guiding a number of companies on how to franchise their business since 1997. Srinivas Rao, Head Consulting, Francorp Advisors says, “We are helping our clients to achieve their franchise objectives effectively. We help them in strategy making, reviewing, legalities, training and launching their products for making them big brands.”
Selecting a suitable consultant for your business is a critical task as you need to look for several qualities in a franchise consultant. Although, it is always better to validate your business model with external business expert or franchise consultant. It should be a continuous process because the business environment changes from time to time and being a businessman you need to be updated about these changes.
Benefits for a Franchisor
When a business concept becomes famous, the business owner starts thinking of expanding it and for expansion in limited resources he chooses franchise business model to go ahead. However multiplying a business through franchise business has been alluring but maintaining it could be a difficult task for a franchisor. Thus, he needs to consider a franchise business consultant for assistance. Nandita Sharma, CEO, Nandita's -The Beauty Zone says, “With the aspiration to become a great brand in the beauty world we started consultancy with the Francorp Advisors in the final quarter of 2012 and covered long way of success via the franchise road till date. Today we have six franchise salons and planning to add more in the cities like Hyderabad, Bangalore and Lucknow. It is helping us to showcase our potential to investors and sustain our 20 to 30 per cent growth rate per year.” Generally, a consultant advises franchisor on expansion plans and with whom he can connect or setup franchise business. Rao, says, “The advantage of consulting franchise expert mitigates the business risk because consultants have updated knowledge about similar businesses in other geographical regions. The expert inputs helps with questions like how much franchise fee to fix, royalty or margin, business formats such as FOFO (franchisee owned and franchisee operated), FOCO (franchisee owned and company operated) etc. He guides in location selection, franchise profiling, operation manual and roll out plan approach etc.” Moreover, when a franchise business model is designed by a franchise expert rather than brand owner, an investor will feel more confident for business plan and become a franchisee.
Points to consider
Being a franchisor, when you start working with any reputable consultant company, you need to follow a standardised process. In your initial meetings you could judge about the consultant expertise by asking the questions related to your business and concerned industries future etc. Once the consultant understands what qualities are you are looking for in perspective franchisees ask him to check his/ her directory to see the available locations and his existing investors who fits in your criteria. Before finalising any consultant, evaluate about its clients with whom he is working and know about their feedbacks etc.
Benefits for Franchisee
There are thousands of franchise business opportunities available in the market in different sectors, which makes difficult for franchisees to choose the right biz opportunity for them. That’s why franchise consultants like Francrop Advisors and others become important for franchisees as they help them in buying a suitable business. Rao adds, “When an investor or franchisee is looking for potential business opportunity, a franchise consultant could guide him in a better way. He can analyse business risks and prepare balanced agreement which satisfies both either a franchisee or a franchisor.”
Before hiring a franchise consultant you need to do home work on the basic points like why you want to be your own boss and which business suits you? With the answers of these questions, you can discuss the available opportunities with your franchise consultant. However it would be more beneficial if you spend time thinking on your expertise, weaknesses and strong areas etc. Most important, consider your finances and decide on the limit of amount for buying any franchise business. Besides, you can ask your consultant for financing option as offered by many franchisors to help their franchisees.
However a franchise consultant is there to make your work easier but right selection of a franchise consultant is a tough task. Do a thorough market research before hiring one.