The role of a franchise consultant and the difference with the franchise manager
Throughout all these years in which we have kept each other company with this column, we have understood an incontrovertible fact, namely that one cannot go anywhere alone and that any entrepreneur intending to embark on the exciting path of franchising must do so with the help of an expert. Imagine making the first parachute jump without the support of an experienced instructor – yes, decidedly risky. However, it is equally important to understand the functions/responsibilities of the franchise consultant and those that remain in the hands of the entrepreneur. Because while abstractly the relationship between the two indicates power, a poor understanding of their respective roles could be detrimental to the success of the franchising project.
To date, the problem for some clients (those seeking advice to turn their brand into a franchise) is understanding the extent of the consultant’s contribution and what instead are the prerogatives of the franchise manager and/or the entrepreneur. Let’s try to focus on this relationship in order to prevent the entrepreneur from creating false expectations from the work of the franchise consultant and, on the other hand, to free the latter from the grip of impractical demands and tasks unrelated to the assignment.
A. The franchise manager/entrepreneur
That of the manager is, most of the time, an internal figure hired with a fixed cost ranging from a minimum of 30,000 euros to even exceeding 70,000 euros gross annually (a cost that varies depending on the experience and complexity of the network to be managed) and which often for franchises in the start-up phase coincides with the figure of the owner. For this reason, from now on, we will use the terms interchangeably.
The franchise manager follows and implements company directives, with the intention of achieving very specific objectives. Moreover, the franchise manager is measured not only on his behavior but also on commercial objectives related to network development.
The franchise manager has limited autonomy since he/she is subordinate to ownership or the CEO. Ultimately, he/she is a long arm of ownership, an employee in the legal sense. The advantage of having a figure like the franchise manager internally is to be able to rely on a dedicated resource for the franchise development project (development of affiliation requests, management, and control of affiliates). The disadvantage is certainly the fixed cost that he/she represents for the company’s budget and the inability to access external know-how, which often can be a revitalizing force for a company.
B. The franchise consultant
The franchise consultant, on the other hand, is a specialized figure capable of transferring to companies a know-how that reduces entrepreneurial risks inherent in a franchising development plan. Added to this is the possibility of reducing risks in the affiliation process through specialist marketing and strategic tools.
Unlike a franchise manager, the obligations of a consultant are means-based rather than results-based, meaning that he/she is required to carry out specific outputs strictly related to his/her assignment. Entrusting a task to a franchise consultant does not mean being able to freely dispose of his/her time like an employee. The franchise consultant, as a freelancer, performs the work commissioned with autonomy and according to his/her own methodology, unless otherwise agreed upon contractually.
Sometimes, the failure to achieve affiliation goals is mistakenly attributed to the consultant, but it escapes the entrepreneur that affiliation is a team result, it’s like crossing the finish line in a relay race where the entrepreneur himself is the last runner, as it is with him that the affiliate will decide to enter into a multi-year contract. The consultant has done his race by passing the baton in the final stretch of the race. It couldn’t be otherwise. The number of franchise openings depends not only on the commercial strategy devised by the consultant together with the client but above all on the contribution that the entrepreneur has managed to make during negotiations and the subsequent organizational ability to start an affiliated point of sale. To the classic question “how many openings will we have in the first year?” I always respond with another question “how many are you capable of?” The franchise consultant suggests an effective tactical and technical approach based on his/her industry experience to start the network, but it is still he/she or the company manager who finalizes the development project. The consultant is a useful means to reach the solution.
And that’s why some franchising companies (especially startups) succeed while others do not. Because the success of a franchising company is indeed influenced by the consultant, but it is determined by the entrepreneur himself.
It is no coincidence that the costs of a franchise consultant are significantly lower than those of an internal managerial figure dedicated to franchising. Therefore, opting for a consultant becomes convenient, especially at a stage when a company does not have significant financial budgets.
The advantage, therefore, of engaging a franchise consultant is to guide the network development project at certainly low costs, at the expense, however, of availability (he/she is not an internal figure and available to the entrepreneur).
In conclusion, it can be said that neither of the two figures excludes the other, indeed. The franchise consultant paves the way that will then be followed by the franchise manager. They are two different and progressive service steps, but they are not minimally overlapping or interchangeable. At the center of all this is still the entrepreneur, who must have the vision (as well as the command), who must know how to delegate, but also take on his/her own responsibilities and not unload activities on consultants and employees. To quote Seneca, “To command is not to dominate, but to fulfill a duty.”
