Why Should I Utilize a Franchise Broker?

By: Dan Brunell - Dan Brunell is a Franchise Consultant with The Business Alliance

 

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There are many advantages to getting help from a professional who knows the inside workings of an industry or issue. Just having someone who can help interpret the jargon associated with a topic that is new to you can be a tremendous help. Most people wouldn’t go to court without a lawyer or purchase a home without the help of a realtor. A franchise broker can help you identify businesses that are closely aligned with your talents, interests and goals. Yes, you could spend months researching different options on your own, but you could be very diligent in your efforts and still miss the one opportunity that is perfect for you.

The Internet is a valuable tool for research, but it is limited. If you do not know where to look or if you rely on search engines to produce the results, you will only find the companies that have paid to be listed high in the search rankings. High visibility on the Internet does not correspond to the relative value of a business opportunity. Due to the immense amount of data that is available on the Internet, it tends to create more questions than answers and it can be a frustrating experience.

There are over 5,000 registered franchises and more than twice as many “Business Opportunities” or “Biz Ops” available in the United States. A franchise broker can help you understand the difference between the types of opportunities so you can determine which format is right for you. Whether it is a franchise or Biz Op, there are many terrific choices and invariably there are some bad ones. A competent broker can help you focus on businesses that have met certain quality standards and help you avoid making a potentially big mistake. Brokers may not have current agreements with every franchise, but they can often obtain the listing if it meets your requirements as well as their own standards. The key advantage is that the agreements they do have are with solid, up and coming or established concepts that will meet the requirements of the new franchise buyer.

One of the biggest challenges for franchise companies is finding entrepreneurs who will be a good fit for their particular business model. As you can imagine, franchisers get thousands of requests for their information packets, but most of these come from people who are not qualified or motivated to actually become a part of their organization. These companies generally cannot support the amount of staff necessary to do an effective job of bringing in new franchisees. This is why the value of a broker-referred candidate is so significant. The company is being introduced to a pre-screened individual who meets the basic requirements, is informed about the opportunity and is more than just casually interested. This saves the franchiser a great deal of time and money, so they pay a fee to the broker if the candidate buys a franchise. This creates a winning scenario for all parties involved.

In the final analysis, the choice and the responsibility for researching the opportunity are yours, but as you contemplate such a huge decision, you should not leave any stones unturned. Getting help from a competent broker is one of the best resources you can employ and since the seller pays the fee, the service is free to you. So, the question becomes: Why not use a broker?