What is a Franchise Consultant
Users going through our site often come across this term “Franchise Consultant” and seem puzzled by what it means. It’s not the easiest idea to understand and a quick search online doesn’t seem to make it that much clearer. The Wikipedia article for “Franchise Consultant” starts by saying “'Franchise consulting' traditionally meant the same consultant-to-client relationship as any other industry wherein the consultant charges a 'fee for services'.”
Seriously? What is that supposed to mean?
After reading that vague description I wanted to write up a quick post about what franchise consulting is and how it can be helpful to someone who is interested in opening a franchise.
One Version of the Term:
This is the version that Wikipedia described in their intro. There was (and still is) an industry for consultants who specialize in helping franchises improve their business practices to improve their bottom line. So think of any other type of business consultant and narrow their range to helping franchises and you have one definition of a “Franchise Consultant”. But, that isn’t the typical definition of the term.
What is Usually Meant:
The term “Franchise Consultant” is now more commonly used to refer to someone who helps potential franchisees open a new franchise and who helps franchisors expand their business. They typically help people at both ends of the business. As for all situations where agents are serving multiple groups (real estate agents are another example) there can be some sort of principal-agent issues involved, but franchise consultants can still be critically important to someone who is looking to start their own business. Franchise consultants have experience and connections within the franchising world that allows them to link new franchisees to the right resources and franchises for them.
Sorry for the quick post but I hope it helped.
Interested in opening a franchise? Take our FREE quiz to find the perfect match for you.
Have topics you want covered by our blog? Email me at email@example.com with questions, comments, or suggestions.
The Franchisee Bill of Rights
On the subject of “fairness” in franchising, we will try to separate the optimists from the pessimists . Hopefully, we will make an optimist out of even the most cynical readers amongst us.
Quantifying Yelp's Impact on the Restaurant Industry
Luca studied the effects of Yelp ratings on the revenue of restaurants and discovered several interesting findings. Studying the relationships of restaurants' revenues to their Yelp reviews in Seattle over a period from 2003 to 2009, he found a significant relationship between a restaurant’s average rating and revenue. One star’s worth of improvement on Yelp leads, he found, on average to an increase of between 5 and 9 percent in revenue. The average rating is more important than the review, as many Yelp users are overwhelmed by the sheer number of reviews on manyrestaurantpages and find it easier to consult the star rating. Luca also found two features which exacerbate the effect on revenue Yelp has. First, the more reviews a restaurant has, the more impact an increase in its Yelp rating will have on its revenue. Second, the more reviews by Yelp “elite” members, the more impact; “elite” reviews have almost twice as much impact as other reviews.
Watch out, Franchisees! 10 Franchisor Red Flags
Only a limited number of states require registration by franchisors, and franchisors are by no means required to register in states where they have no intention of selling franchises. However, if a mature franchisor appears to be consciously avoiding the registration states, this may suggest some level of internal concern about the FDD, the franchisor’s sales tactics, or the franchise system as a whole. The cover pages of the FDD will identify where the franchisor is required to register (and whether it has registered or not), and the charts in Item 20 of the FDD will explain whether the franchisor has ever sold a franchise in any of the registration states.