How do you manage the risks and challenges of franchising with a franchise consultant?

Part 1 - Avoid franchise consultants who are templated Franchise Disclosure Document - FDD & Franchise Agreement - FA mills. These document mills either have non-attorneys using fill in the blank templates to do your FDD then they give it to you or they may get a "rubber stamp" review from an attorney which is dubious.

A franchise consultant offers invaluable expertise in navigating the complexities of franchising, significantly managing risks and challenges. They provide tailored strategies for growth, help in understanding and complying with legal requirements, and assist in selecting the right franchise opportunities. With their deep industry knowledge, consultants can identify potential pitfalls and offer solutions, ensuring informed decision-making. Their network and resources can also expedite problem-solving and leverage opportunities, making them a crucial asset for successful franchising.

I think this article may be mixing terms. More often today, the term "Franchise Consultant" applies to someone who provides guidance to an individual who is open to the concept of exploring different franchise ownership opportunities. While there are some Franchise Consultants who can advise business owners on how to franchise their concept, those business owners will really need a great Attorney with experience in preparing the necessary legal documents needed to franchise their business.

Part 2 - Most FDD document mills focus on business owners who want to sell their franchise offerings in non-registration franchise states since for the non-registration states there is no examiner review of your FDD and FA nor does the FTC even look at these documents since you cannot send them to the FTC for review or approval. One of the biggest risks for business owners utilizing franchise consultants who are acting as attorneys to write FDDs and FAs is that if use them and there are errors, untruths or other deficiencies with in your documents and you get sideways with one or more franchisees you will pay more to get out of that jam then you would have doing this right with a competent and experienced franchise attorney.

Part 3 - While the FTC does not look at FDDs or FAs they do have a complaint form that prospective franchisees and people who have bought a franchise to send in their complaints.

In reality, you'll most likely work with multiple franchise consultants, as there's no such thing as an expert in ALL aspects of franchising. Just like in other areas of business, there are legal experts, operations experts, marketing experts, etc. Even within the domain of marketing alone, there are multiple subcategory experts that are essential to the success of any business. For instance, a PR expert doesn't typically have expertise in website development. Therefore it's important that not only you collaborate well with the chosen experts, but they also collaborate well amongst themselves, for the benefit of join client.