If you are looking into buying a franchise, you may have discovered that getting started with a franchise can be difficult. There are thousands of franchises to choose from in multiple industries. I am sure there has come a time where you must have asked yourself this simple question, "Where do I start?"
Franchise brokers provide a solution to that problem by tracking down potential franchise opportunities. Although brokers may go under many titles (consultants, advisors, business coaches), their main purpose is to facilitate a connection between franchisors and franchisees.
If you are planning on buying a franchise, you need to determine whether working with a broker will help you choose the option that makes sense for your needs.
When it comes to your choices in business and finance, it does not hurt to be wary. Choosing your broker is no different. There are important considerations you should keep in mind when working with franchise brokers.
Pressure - Franchise brokers are paid by franchisors upon completion of a sale. Some are paid with a flat fee while others are more akin to salesman, being paid by commission. Because of this, some brokers may attempt to pressure you to buy more expensive options than is necessary.
Limited Information - Many brokers represent only a few franchisors out of thousands in a particular industry. With such limited choices, you may not be receiving the best franchise options. It is up to you, the franchisee, to inquire as to how many franchisors the broker works with.
What are the Advantages of Using a Franchise Broker?
Avoid Wasting Your Money - The direction of a good broker gives you the ability to navigate your purchase and can prevent you from falling for disreputable companies or outright scams.
Experience - Brokers know both the industry and the mistakes of past franchisees. It is worth having discussions with your broker to help you avoid pitfalls and to educate you further about the process of buying a franchise.
Personalized Advice and Selections - Your money, interests, and resources are considered when brokers match you with franchises. This allows you to choose a franchise that is in line with your current status and future plans.
If you decide you'd like to hire a broker to assist you down the franchise purchase journey, before you make a decision on which broker to hire, do your research, check references and speak with previous clients. This is a big decision, don't take it lightly!