A financing option often overlooked that is...
Buying a franchise is akin to buying a house. You’ve got to spend a lot of time looking, considering, comparing and thinking. And most of us don’t want to do all that work on our own. That’s why we call a real estate broker or agent to guide us through the journey. In franchising, many buyers rely on franchise brokers, and here are a few reasons that a broker might be right for you.
- Franchise brokers are educators. First and foremost, they are salespeople, but aren’t all good salespeople educators? Do you want to buy a house from an agent who can’t tell you why it’s a good idea to buy a house? Brokers can teach you about franchising, including legal considerations, trends, financing, and the realities of franchise ownership. A good franchise broker will be able to answer your questions about franchising and guide you through the selection process, ultimately helping you to discover an opportunity that makes sense for you.
- Franchise brokers are listeners. Or they should be! Good franchise brokers listen to their clients’ needs and expectations and keep their clients’ interests in mind at all times. Listening allows the broker to do a thorough job of educating clients about the pros and cons of franchising, and about the potential of a particular franchise opportunity. If you say you don’t like working in an office, or you want to work from home, or you’d rather not work with other people, the broker should lead you to opportunities that satisfy your desires.
- Franchise brokers can reduce your risks. There are always risks in any business, but brokers can help you avoid many of the risks. Brokers, for example, will shy away from representing bad franchisors, thus saving you from that experience. Brokers can help you assess franchise opportunities to find those that meet your needs and expectations.
- Franchise brokers help you prepare to meet franchisors. Almost every franchisor sponsors a Discovery Day. These are also sales events. Remember, franchisors are sales people, too! Ultimately they want you to buy their franchise. A broker will help you prepare for the Discovery Day by thinking about the questions you need to ask and knowing whom to meet when you visit the franchisor.
- Franchise brokers help you prepare to meet franchisees. As a franchise prospect, you’ll want to meet people who are already operating the business you’re thinking about buying. Where do you find them? What do you ask them? Brokers will prepare you for these opportunities.
- Franchise brokers understand the franchise documents. Do you know how to read a Franchise Disclosure Document or a Franchise Agreement? Probably not. But brokers do. Before representing a franchise brand, brokers are expected to study the franchisor’s documents and be able to explain them to prospects. This will save you considerable time and confusion.
- Franchise brokers “sell” you to the franchisor. This is especially helpful when the franchise you want to buy is “hot” or in demand. Why would a franchisor consider you when there are so many other applicants for the same franchise? Franchisors listen to their brokers because they trust them. Brokers can quickly identify appropriate prospects for the franchisor’s business.
- Franchise broker fees are (usually) free. The franchisor pays the broker a commission upon the sale of a franchise, so brokers do not take fees from buyers. Some brokers may charge an education fee, or an assessment fee for a personality tool. However, most good brokers will not charge a fee.
Working with a franchise broker can save you time and money, and can usually lead you to a franchise that meets your expectations. Of course, you should always check out the broker in advance – work only with experienced brokers who can provide you with a variety of client testimonials.