How can you help a client choose the right franchise model?

2 Research different franchise models

Once you have a clear picture of your client's profile, you can start researching different franchise models that match their criteria. There are three main types of franchise models: product distribution, business format, and conversion. Product distribution franchises focus on selling a specific product or service under a licensed trademark, such as Coca-Cola or Exxon. Business format franchises provide a comprehensive system of operation, training, and support, such as McDonald's or Subway. Conversion franchises allow existing businesses to join a larger network and benefit from its brand recognition, marketing, and resources, such as Century 21 or H&R Block.

3 Compare and evaluate franchise options

After narrowing down the list of potential franchise models, you need to compare and evaluate them based on various factors, such as the initial investment, the ongoing fees, the profitability, the reputation, the market demand, the competition, the legal terms, and the franchisor-franchisee relationship. You can use various sources of information, such as the Franchise Disclosure Document (FDD), the Franchise Agreement (FA), the Franchise Business Review (FBR), and the feedback from existing franchisees, to gather and analyze data on each option. You can also use various tools and methods, such as the Net Present Value (NPV), the Internal Rate of Return (IRR), the Break-Even Analysis (BEA), and the SWOT analysis, to measure and compare the financial performance and viability of each option.

4 Validate your client's decision

Before your client makes a final decision, you need to validate it by testing and verifying the assumptions and projections that underlie it. This includes conducting a market research, a competitive analysis, a customer survey, and a feasibility study, to confirm the demand, the differentiation, the satisfaction, and the profitability of the chosen franchise model. You also need to help your client prepare a business plan, a financial plan, and a marketing plan, to demonstrate the viability, the sustainability, and the growth potential of the chosen franchise model.

5 Negotiate with the franchisor

After your client has validated their decision, you need to help them negotiate with the franchisor to secure the best possible terms and conditions for their franchise agreement. This includes negotiating the initial fee, the royalty fee, the advertising fee, the territory, the duration, the renewal, the termination, the transfer, the support, and the training. You need to help your client understand their rights and obligations, as well as the risks and benefits, of each clause and provision. You also need to help your client review and sign the franchise agreement, as well as comply with any legal and regulatory requirements.

6 Support your client's launch and operation

Finally, you need to help your client launch and operate their franchise successfully, by providing ongoing guidance, advice, and assistance. This includes helping your client secure the necessary funding, equipment, supplies, licenses, permits, and insurance. It also includes helping your client recruit, train, and manage their staff, as well as implement the franchisor's standards, policies, and procedures. Moreover, it includes helping your client monitor and evaluate their performance, as well as identify and resolve any issues or challenges that may arise. You also need to help your client leverage the franchisor's network, resources, and support, as well as seek new opportunities for improvement and growth.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?