There are a lot of people who are out of work, and they are running out of their unemployment benefits. As that money and income stops, they are going to need to find a job. If they have some money saved up, or they still have good credit, buying a franchise might be one way out of that pickle. Now then, let’s say you’re going to buy a franchise you need to hire someone to help you pick out the right franchise? Should you hire a franchise consultant to help review your final choices before you actually sign a franchise agreement?
Yes, I do believe that would be a good idea and the reason is because buying a franchise is a complicated investment. Generally these franchise disclosure documents including the franchise agreement are well over 300 pages with attachments. Although they are written in plain simple English, and not legalese so they are easy to understand, there is a tremendous amount of information in there, and lots of case law that goes with the franchising sector.
Additionally, there are certain red flags to look for, and a franchise attorney, and a franchising consultant will know what those are. They might also assist you in going to visit current franchisees, and checking to see if the franchisor’s franchisees in your local region are actually making money, and if they are happy with the level of support. As a new franchise buyer, you may not know which questions to ask, but I guarantee you a smart franchise consultant who’s been in the industry for quite some time knows exactly which questions to ask, to get to the bottom of all the issues.
Now then, how much should you pay for a franchise consultant to help you find a franchise that’s right for you and your family? Well, paying up to $4000 to $5000 would be reasonable, especially a large investment which could be over a half-a-million dollars, for instance setting up a restaurant. Just make sure that the franchise consultant isn’t making money on the side, or splitting a commission with the franchisor. If they are it is required by law that you are notified, and that has to be listed also in the franchise agreement, as that franchise consultant in that case is a paid salesperson, at least the way the law reads.
Additionally, you should take this very seriously, because chances are you will be signing your name to obligations and loans, and also obligations which are listed in the franchise agreement which could be a 10-year term. It’s not something you can start and walk away from if you don’t like it. More of a good reason why you should hire a franchise consultant to check it out and make sure it’s right for you, and the investment makes sense from a return on investment standpoint. Please consider all this and think on it.