Is the Franchise Brokering Market Too Damn Crowded?
"16 years later everybody and their cousin is a so called franchise consultant"
Editor's Note: Joel Libava, known here as "Franpro", is one of Blue MauMau's earliest members and until just a few days ago was a franchise consultant for the Cleveland, Ohio area with FranNet, one of the industry's largest network of franchise brokers. He now heads his own franchise consultancy.
After a 6.5 year ride, I have left the Franchise Consulting group I was a member of, Frannet. My late father, Jerry Libava (pictured), was one of the original members, joining Frannet back in 1991. My Dad was in the corporate world for a stupid amount of years, traveling 4-5 days a week, almost all the time. His last "job" was as the Franchise Dev. Director of Physicians Weight Loss Centers , based near Akron, Ohio. The Federal Trade Commision came down hard on the diet industry in the late 80's, and Dad was downsized.He had a kid in college (Not me, I was learning things the hard way at the time), and normal debt like anyone else, but he said:
"Enough is enough! No more corporate America for me!" So he decided to get into business for himself. His business was called International Franchise Development, which he and my Mom named during a ride in the country. He started his business, found out about a guy by the name of Howard Bassuk , who was based out of San Diego, and he joined Howie with a few others. They were the pioneers of the Franchise Consulting Industry. Howie was the brains (Genius level),and 5 or 6 guys at the time were the brawn.
My father helped lots of local area residents get into business, and stayed active until 2000-2001.
I was downsized about that time {2000-2001}, from the automobile franchising sector, where I was in sales and management, and knew by that time what I didn't want to do anymore, which was working for others. My Dad offered to train me in his business, and after some deep self-thought, I decided to give it a shot. Well, I have to tell you, it was the best decision I have ever made in my career. I am now doing things on my own, in Cleveland, Ohio, and will continue to do so. I am very well connected in my city, very well known, and am THE guy in Cleveland for "anything franchise .I own a few websites (Statefranchisecenters.com) and a couple of increasingly popular blogs.
This leads me to the topic of discussion which I just started Part 1 on my blog: Is the Franchise Consulting-Brokering market too damn crowded?
I realize that a can of worms has just been opened, but my personality dictates that this must be discussed. When my Dad started in Frannet, there were really no competitors. Fast forward 16 years later, and everybody and their cousin is a so called franchise consultant. I am sure some "consultants" who have entered the market in the past 5 years are pretty good, and maybe even great! But for the most part, the "consultants" entering the market lately are the ones from franchise companies like The Entrepreneurs Source. They used to be somewhat of a competitor in my market area, but 2 of the franchisees have left in the last year. This wonderful franchise company sells franchises to people to sell franchises.
What I mean is they themselves are a franchisor. "For a $75k-$100k "investment", you too can learn to be a highly paid, home based franchise consultant." (That is my little marketing spin, they have their own). So Terry Powell, the CEO, sells these franchise opportunities to former managers and execs from corp. America (most, who have never owned their own business, or have been even close to a franchise, other than eating some McD's hamburgers. That is not a slam on the franchisees. Our business is about helping others find the right fit.
Ladies and Gentlemen, Start your engines! Thought. Opinions. Gut wrenching honesty. Whatever. I hope to help out 2 groups of people in this discussion:
- Future Franchise Consultants who think they will make tons of money, and that this is "easy".
- Future Franchise Owners of one of 3,500 different concepts, who may work with one of us.
