Many people are wary about using franchise brokers for fear that the broker will talk them into buying a franchise they really don’t want. Franchise brokers are, first and foremost, sales people, and given that they don’t get paid until they make a sale, there’s good reason to be concerned about using a broker when you’re thinking about buying a franchise.
On the other hand, most people who buy houses use a real estate broker or agent, and they also are sales people who don’t get paid until they make a sale. Will they talk you into buying a house you really don’t want? Possibly, but it’s less likely if you do your homework and know what you want to buy.
A Broker’s Value
Using a franchise broker – a sales person who represents multiple franchise opportunities – is not an excuse for ignoring the homework that you should do prior to buying a franchise. When you know what you want to buy (because you’re passionate about operating a particular kind of business, or because it’s a “hot” franchise), and you know what you’re qualified to buy (financially and skill-wise), a franchise broker becomes an advisor, every bit as valuable as an accountant or lawyer.
But what if you don’t know which franchise you want to buy, or what you’re qualified to buy? One franchise broker thinks that’s all the more reason to call him, understandably. I’ve known Jason Killough for some 20 years. In fact, he used to sell franchises for me when I was a franchisor. Since 2009, Jason has been a franchise broker in Dallas, Texas. He’s part of The Entrepreneur Authority, one of the most credible franchise broker networks in the USA. “When a prospect doesn’t know what to buy, I can help identify opportunities that the prospect might not even know about,” explains Jason, who represents a variety of franchise companies.
Match Opportunities & Expectations
Of course, it’s not enough to identify opportunities for you. A good franchise broker will also help match opportunities to your expectations and skill set, as well as your checkbook. And again, Jason knows how to be helpful. “I help my prospects with their due diligence,” he continues, “and I save them a lot of time. I not only know who the franchisor will accept as a franchisee, but I also know who the lenders will accept, including any ‘blemishes’ that may be on the prospect’s credit report.”
Perhaps the best part of working with a broker is the fee – it’s usually paid for you by the franchisor. Franchise brokers are working for commissions. Some may charge incidental fees for training or personality assessments, but in most cases you won’t pay the broker – your franchisor will.
You are not required to use a franchise broker, but all things considered it may be a good idea. If at any point you think a broker is leading you toward owning a franchise that you don’t want, walk away, stop answering your phone, or simply tell the broker, “I don’t want to own that franchise. Can you help me find a better choice?” If he or she is worthy of being a franchise advisor, the broker will help you find a better choice!
This post was written by Dr. John Hayes