Franchise Brokers: What Franchisees Should Know
A franchise broker (sometimes called a consultant) focuses on helping the franchisor and franchisee come together in business. Mainly, they help specific franchises to expand their business by helping potential franchisees find the right business for them. This means they work at both ends of the franchise business. So it’s important to know how to pick the right consultant for your needs.
How do franchise brokers work?
Franchise brokers work with about 10 franchises to help them expand their business. They have the information about the franchise, and now all they need is you. Think of them like a matchmaker for business!
When you meet with a franchise broker, they’ll offer you their matching services for free. They depend on this freedom to get your business. You’ll tell them all about your budget, your desires, and your dream franchise. In response, they’ll match you to about 3 of their contracted franchises according to which they see fits you the best.
Remember that brokers match you to a franchise for free. This is good for you. It means you can speak to multiple franchise brokers until you can become part of your dream franchise, rather than tying yourself to someone who is not a good match just because you paid for it. Choose someone who helps you.
When you work with a franchise broker, you’ll be a candidate, not a client. That is because the franchisor is the broker’s client. The franchisor, after all, is the one paying the broker, not you. And they’re getting 40-50% of the initial franchise fee. So you’ll have to be careful to choose the right brokers who are interested in you and not just in themselves.
You can catch this quickly if the franchise broker doesn’t ask about your finances and your desired business experience. If they’re just trying to sell you on an expensive franchise that doesn’t seem right for you, question their motives.
Get all the information
The broker you choose should know all the details of the franchises they present. You’ll need to know as much as you can about a company, down to its culture and day-to-day life. This will affect how you run your business, and whether it’ll be an enjoyable experience or a long-lived regret.
When reviewing their options, be aware that you’ll only get to see franchises your broker has a signed contract with. This means you should take it with a grain of salt when a broker promises to show you franchise opportunities that he or she doesn’t work with.
Trust your feelings
Don’t let yourself feel pressured at any point of the consulting process. This partnership is to fulfill your dreams, not the broker’s. If you do feel pressured, that may be a huge red flag. Remember that large commission? Someone who pressures you may be interested in lining their own wallet with an expensive franchise you won’t want.
You should also look for a genuine connection with your franchise broker. That real connection and trust will get you the best franchise for your needs. And, if there’s a genuine connection, you’ll likely be looking out for each other. What better trait could there be in a partnership?