Franchise Consultant Information
Below are many answers to commonly asked questions about being a franchise consultant. Feel free to request more information if you have additional questions.
Commonly Asked Questions
What is a franchise consultant?
Similar to a recruiter or a realtor, except with a focus on franchising, a franchise consultant works with those that are looking to purchase a franchise.
How are consultants paid?
Franchise consultants are paid on a commission basis by the franchisor when a client they refer buys that franchise. Commissions commonly range from $15,000 to $30,000 per deal although can sometimes even exceed this amount. There are cases where a franchise consultant will make in excess of $100,000 on a single transaction. That being said the current industry average commission is about $25,000.
Why do franchisors use consultants?
A recent study conducted by FranConnect showed that a client introduced by a consultant was 5 times as likely to purchase the franchise as any other marketing method. In addition consultants save franchisors thousands of dollars and countless hours by handling much of the marketing and weeding out the tire kickers and non-qualified prospects.
What is the failure rate?
Like most industries, there are certainly people that take a shot at being a franchise consultant and decide it is not the right business for them and move on to other things. An estimated 20% of new consultants decide this is not the business for them within the first year.
how many franchisors use consultants?
Currently an estimated 700 franchisors rely on consultants to assist with their growth. This number will vary from group to group as not all groups work with just any brand and not all brands work with every group. A good consultant knows to focus on the good brands, not the most brands.
Is having more brands better?
A common misconception is the more brands you represent the more money you make. While having a robust, well rounded portfolio of brands is important, most top producing franchise consultants make 80% of their money with just 10-15 brands. In fact, some of the top producing groups in the industry actually represent the fewest brands. In truth the broker group is the one that benefits the most from having the most brands, not the consultants.
Can I Be a Franchise Consultant for Free?
This depends. While there are consulting groups that do not charge an upfront fee they tend to be very selective in who they bring into their group. Click here to read more.
Franchise consultant vs. broker?
While there are true “consultants” that are hired by franchisors to consult on various aspects of franchising, in this sense a consultant and a broker are one in the same. Other names commonly used are coaches and advisors.
How much do consultants make?
As with many industries is varies widely. Some consultants earn in excess of $500,000 per year while others only do 1 or 2 placements a year earning $25,000 – $50,000 per year. Much of this depends on how aggressively a consultant markets and how much they choose to work on their business.
Why do investors use consultants?
A good franchise consultant can save their client time and frustration by handling much of the initial research legwork on their behalf. In addition a consultant can help educate their clients about the franchise discovery process and be able to introduce and explain potential franchises they may have not previously considered.
Check out this article on why investors use franchise consultants.
Where do franchise leads come from?
All sorts of places! Some consultant groups sell leads to their brokers at a very tidy profit while other groups teach and help their consultants to market. Leads are generated through a combination of advertising certain franchises, similar to a Realtor advertising a home for sale as well as advertising their services both online and through local networking. Click here to learn more about franchise broker leads.
Which group is the best?
Like any franchise or business, all groups have their advantages and disadvantages. A lot depends on the type of culture you are looking for and your overall goals. At the end of the day success or failure is yours to be had with whatever group you choose.
Franchise Consultant Vs Business Broker
While business brokers and franchise consultants share many similarities there are also key distinctions. Click here to learn more.
How can I learn more?
Easy – visit our Request Info page and choose the groups you would like to explore. We will connect you with an honest, ethical and active consultant with that group. We feel speaking with an actual fellow consultant vs. their hired sales people is a better way to get the true scoop on being a franchise consultant.