Like any other investment, purchasing a franchise business has some risk factors. However, hiring a franchise broker can considerably help minimize them.
If you are planning to buy a franchise, it is best that you gather as much information as you can about the broker you work with. You also get to explore franchise opportunities that ensure a smooth purchase procedure.
Simply put, franchise brokers are contracted by companies to introduce a franchise to a candidate. People who look for franchise opportunities, eventually get to learn about the broker networks.
Who is a Franchise Broker?
Franchise brokers are consultants who narrow down your options, assess the franchise opportunities, and help you avoid the mistakes most franchise owners make. In essence, franchise brokers are franchising experts who employ their industry knowledge and expertise to help you steer your franchise purchase.
Franchise brokers are also known by many names such as franchise advisors, referral sources, franchise consultants, and business coaches. It’s important to mention here that they receive their payment from the franchisor only when an actual purchase is made by a franchise candidate.
Importance of Hiring a Franchise Broker
A franchise broker helps franchisors grow their businesses in an efficient manner. There are a number of advantages to hiring a franchise broker for both the franchisor and the potential franchisee.
For the Franchisor
There are several benefits of hiring a franchise consultant that helps franchisors in boosting their business growth, including:
Making Recruitment More Efficient
Typically, franchisors have a lot of important work to deal with. It’s important for them to focus on their personal life while running a franchise operation efficiently. They need to manage several franchise-related items such as support, training, legal considerations, and so on.
Franchisors spend a lot of time talking to investors who are planning to invest in their businesses or brands. Here’s where franchise brokers come into the picture. The franchise discovery process becomes useless if a candidate doesn’t like, can’t afford, or just isn’t interested in the brand.
A franchise broker does all the research and unveils critical factors before a candidate reaches the franchisor. They also take the responsibility to browse through plenty of leads to find qualified candidates that help franchisors.
Find Quality Candidates
Finding competent and quality candidates is vital to the success of a franchise. An efficient franchise broker pushes themselves to understand the type of candidate that a franchisor seeks and find both qualified and quality candidates accordingly. Some businesses prefer a passionate operator or owner while others prefer franchisees that are large-scale business builders.
However, the definition of a quality candidate can vary depending on the values and mission of a franchise. So, hiring a franchise broker can be beneficial for franchisors as they know the strategies to ask the right questions and determine a good fit.
Act as Partners
Usually, franchise brokers work conjointly with a franchisor while assisting a candidate in getting through the franchise discovery process. Often, candidates feel most comfortable with franchise brokers as they play a neutral role.
Also, franchise brokers can successfully help a candidate deal with worries and indecision. The broker provides the answers to questions that candidates may feel uncomfortable asking the franchisor.
Organize the Process
Staying focused during the discovery process is a prerequisite for planning and organization. In such cases, a franchise broker can help both the franchisor and candidate with reminders to keep track of the nitty-gritty.
Oftentimes, there are many steps to manage such as contacting current franchisees in the system (i.e. validation), securing funding, reviewing the Franchise Disclosure Document or FDD, and a lot more.
During the entire discovery process, the brokers provide sound guidance to the candidates and help them minimize any risk. This way, franchise brokers help make the whole process efficient and well-organized.
Negotiate and Convince Candidates Efficiently
Franchise brokers can negotiate better and efficiently as they have sound industry experience and connections. Simply put, they can come up with a better return on the investment by understanding candidates’ needs as they have a working relationship with the franchiser.
There is a constructive trust that develops between both the parties from the very beginning when the candidate is introduced to the franchisor by a franchise broker.
Saves Time and Money
Brokers can inevitably save you time and your hard-earned money with their in-depth industry knowledge and experience. Once hired, franchise brokers become an essential part of your team without the burden of a huge extra cost on you.
They are efficient enough to provide all the necessary information and tools required for making the process hassle-free. This means you can easily avoid spending the high setup cost. This way, you will be able to save your business from failing in the long run.
For Prospective Franchisees
There are several benefits of hiring a franchise consultant that helps franchisees in accelerating the growth of their business, including:
Offer Proper Knowledge
An efficient and reliable franchise broker can guide a candidate in a comprehensive way about the costs, connections, opportunities, and regulations that come with a particular franchise.
Provide Thorough Assessments
Often, a franchisee happens to go through a personality test to determine if franchising is right for them. In such cases, the broker invests their time to evaluate the financial situation and previous experience of the candidate along with the skills they will add to the franchise while preparing them for the test.
Help Find the Right Direction
Franchise consultants introduce candidates to the available opportunities on the basis of their assessments. This helps the prospects determine the right ways to move forward.
Assist Throughout the Discovery Process
Candidates go through a due diligence process which typically takes a few weeks. It gives a candidate the chance to learn about the executives of the franchise company and ask important, relevant questions. The franchise broker provides the candidate with proper guidance throughout this process to complete it successfully.
Help Make Better Decisions
A prospect often has the requirements necessary for an in-person meeting with the franchisor and their leadership team. In such circumstances, a consultant guides the candidates and assists them with making the decision on whether investing in that particular franchise is the right decision.
Takeaway
Franchise Brokers play a major role in upholding the entire franchise industry. They act as a catalyst and help the brands accelerate their growth, allowing them to become successful.
Using the services of a franchise consultant network lets you embrace the opportunities to engage with the pre-qualified leads. This way, they take less effort and time to close on your dream business.
***
Resources:
Reasons Why You Need a Franchise Broker. (2022). Retrieved 13 June 2022, from https://www.franchisegator.com/articles/the-benefits-of-using-a-franchise-broker-12617/
Is a Franchise Broker for You? – Franchise.com Blog. (2022). Retrieved 13 June 2022, from https://www.franchise.com/blog/is-a-franchise-broker-for-you/
Daszkowski, D., & Daszkowski, D. (2022). Five Reasons Why Franchisors Need Franchise Brokers. Retrieved 13 June 2022, from https://www.franchisewire.com/five-reasons-why-franchisors-need-franchise-brokers/
Advantages and Disadvantages of Franchising – NerdWallet. (2022). Retrieved 13 June 2022, from https://www.nerdwallet.com/article/small-business/advantages-of-franchising
What Do Franchise Brokers Do – Franchise Blog – MSA Worldwide. (2022). Retrieved 13 June 2022, from https://www.msaworldwide.com/blog/what_do_franchise_brokers_do/
TFT, M., TFT, M., TFT, M., TFT, M., & TFT, M. (2022). 3 Reasons why you need a Franchise Broker – The Franchise Talk. Retrieved 13 June 2022, from https://thefranchisetalk.com/franchise-tips/3-reasons-why-you-need-a-franchise-broker/
Cheatham, J. (2022). 5 Good Reasons to Work With a Franchise Broker. Retrieved 13 June 2022, from https://www.franchise500.com/article/415349
The Benefits of a Franchise Broker. (2022). Retrieved 13 June 2022, from https://www.ifpg.org/buying-a-franchise/the-benefits-of-a-franchise-broker
