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Franchise consultants: are you being served?

Written by Maria Barr on Monday, 10 October 2016. Posted in Analysis

Bringing in the big guns can shake things up and inject fresh thinking into your franchise but can a consultant ever really know your business like you do?

Franchise consultants: are you being served?

Now’s certainly a good time to be a consultant. Research by Adzuna, the recruitment portal, shows that the average consultant salary is up by 8.9% compared to last year while there are 10% more consultant jobs being advertised than a year ago, as businesses look to external parties to help steer them through uncertain post-Brexit times.

Some people, perhaps uncharitably, say management consultants have a tendency to “sell you a watch, then tell you the time”. But the role of a franchise consultant is slightly different. Not to be confused with a franchise broker, a franchise consultant can provide strategic advice and sometimes hands-on help to a business at a range of stages in its development. At their best, a franchise consultant can help connect franchisors with the right people in a new market, ask probing questions like only someone outside the business can or even craft documentation on your behalf. At their worst, they’ll offer a cookie-cutter approach and bill you to the high heavens.

Franchising 101
The most common stage a consultant is usually brought on board is in the very early days, when a business owner is first considering franchising. They may know their business inside out but franchising is a beast of its own. To newbies, the entire concept is still very alien and the idea of assembling a franchise manual can be daunting, explains Suzie McCafferty, managing director of Platinum Wave, the franchise consultancy. Her clients are often looking for a beginner’s guide and can sometimes even muddle up terms like licensing and franchising. “Franchisors underestimate just how much work it takes to become franchise-ready and jobs like preparing the operations manual is a challenge for owners too busy running their business to get the strategy down on paper,” she says.

This of courses makes business owners very vulnerable, as Cheryl White, managing director at Apollo Care, the care franchise, found out. Turning to a consultant was a no-brainer when White was first considering franchising and was feeling overwhelmed while doing initial research. “It was a different language to me,” she says.
Unfortunately she didn’t have the best experience. Having fobbed off her attempts to see the documentation they were working on, the consultants finally gave White a glimpse five months into the process. And it wasn’t good. “The prospectus was a joke and they’d just guessed when it came to the figures,” she says. The consultants hadn’t sought any input from her or tried to understand what she wanted from the franchise model but had instead just used ready-made templates. They hadn’t even got her company name right. After seeking a second opinion, which confirmed her misgivings, White finished the manual and legal documents herself but regrets the time wasted with a less than reputable consultant. “When I look back now I was so naive,” she says.

After take-off
The role of the consultant doesn’t end once a franchise has gotten off the ground by any means. Given their industry contacts and know-how, consultants are often asked to help with recruiting the right franchisees or helping a company enter a new market at home or abroad. Going global is particularly complicated and requires careful preparation, says Bill Pegram, director of marketing at The Franchising Centre, the franchise consultancy. “It’s not about just dumping your business in a new country and hoping it works,” he says.

Consultants are useful because no franchise network can have in-depth knowledge of all overseas markets: a consultant can prove invaluable, giving insight into legislation, market trends and perhaps even supplying business contacts. They can also help a franchisor check that their business is ready to take the step in the first place and run through process of identifying where and how to approach going global.

Paul Thompson, founder of Water Babies, the franchise that offers swimming classes for babies, says looking outside the network is particularly important at this crucial stage because a consultant is able to see things from a different perspective and challenge your assumptions. “When we first started exploring overseas markets to expand into, we assumed that countries like the US and Australia would be the natural fit,” he says. “But our consultant challenged that thinking and showed us where the real opportunities lay.”

It seems fairly clear that outside opinions are helpful at these key milestones but what about the rest of the time? Consultants also have an ability to shake things up, even when everything seems to be ticking along nicely. It can take someone with an external perspective to help a franchisor spot an opportunity or something that could be done better. “Sometimes they come to me saying ‘I franchised my business a few years ago but I’m a bit stuck,’” says White, who now runs her own consultancy. In that case, the consultant plays the role of coach and mentor, helping a franchisor work out what their next move should be.

But this requires an ability to ask for help and admit that there are things that can be improved upon, which Pegram says franchisors can be reluctant to do as often their egos can get in the way. “They’re afraid I’ll expose a weakness,” he says. When it comes to admitting that their business is not doing as well as it can be or it’s clear they don’t have the expertise or contacts a consultant does, franchisors can be very wary. “Anything that looks like a failure of management is a no-go for franchisors,” he says. But sometimes those tough questions need to be asked.

Finding the right fit
So how do you get the most from your consultant? Firstly, do your homework on them. White urges franchisors to do their due diligence by checking consultants have previous business experience and getting references, rather than being sucked in by a shiny website and a convincing pitch. Crucial questions to ask include what brands they have taken to market, what their involvement was and how much time they’d be able to dedicate to your business. Equally important is making sure that the chemistry is right and there’s a match in values, adds McCafferty.

You also have to be prepared to put the work in to help a consultant to get to grips with your model. “A consultant will take time to get to know that business but they can never know a client’s business as well as the owner can,” McCafferty says. A mistake franchisors can make is sitting back and expecting the consultant to do too much.
And as for White, now that she’s a consultant herself, whenever she is helping someone assemble a manual she sends it to them one section at a time to review. This means that by the time it’s completed there are no surprises. “It’s their business and the documentation has to be personal to them,” she says. So if you can’t remember the last time you spoke to your consultant, you know something’s up.

It’s equally important to know when to push back: an open and honest dialogue is best and you don’t have to take a consultant’s advice wholesale. Thompson recalls when Water Babies was venturing into the Middle East and had teamed up with a consultant. At one point, he challenged one particular piece of advice he received on how to enter the market, which resulted in a more robust strategy.

There will always be charlatans offering discounted packages and, given the eye-watering costs involved with franchising, it’s easy to understand the draw of a low-cost deal. But, when used well, consultants can be exactly what you need. Even if you didn’t know you needed it.

About the Author

Maria Barr

Maria Barr

As our web editor, Maria is on the lookout for stories and news about Britain’s most exciting startups and small businesses. Part Singaporean and part Scottish, Maria has a background in content marketing and editing.

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