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Franchise brokers and consultants
Franchise Business Buyer's Guide
While most franchises are sold directly by the parent franchisors, there is a growing set of middlemen called franchise brokers or franchise consultants. Much like real estate agents, they work to help match buyers and sellers. Their services are free to the buyers - they are paid a commission by the franchisor.
Working with a franchise agent involves a couple of steps. First, they will consult with you to determine your needs, skills, and available capital.
Once they have a good understanding of your situation, they will recommend a few companies that they think will be a good fit based on your interests, financial qualifications, and the current market. Then they will put you in touch with the franchisor directly.
There are a couple of advantages to using a franchise consultant:
- They pre-screen franchisors, making sure the companies they represent are responsible and financially fit.
- They can introduce you to franchisors you may never have found on your own.
- They will help you make your case to the franchisor.
- It's free!
The only real disadvantage is that each franchise broker has only a limited amount of companies that they work with, so you may miss out on opportunities that would be great for you. Some brokers are focused on particular industries, which can be an advantage if you are certain you want to operate in that industry, but is too limiting if you are trying to explore all your options.
A broker who recommends a "hot" opportunity after 10 minutes on the phone is not someone you should work with. Good brokers are consultants, not salespeople - remember, they get their commission from the seller, not the buyer. They should have considerable experience working with franchises, be good listeners, and be able to consider your specific situation - not just your wallet.
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