Using A Franchise Broker

The franchise industry is vast, confusing and flat out overwhelming at times, especially if you are on your first franchise or business venture. Do you qualify? Is it available in your area? How fast are they growing? The list goes on. While a consultant won't represent or have knowledge of every franchise out there, most good ones will be very savvy on the industry in general and represent anywhere from a dozen to hundreds of franchises.

The Franchises For Dummies book answers, "Absolutely Not" to the question of, "should I work with a franchise broker or consultant". I've read "Franchises for Dummies" and will say - base your knowledge on that read and you may be just that - a franchise dummy. Read everything, seek everyone's advice, but do yourself a favor and don't rely on the For Dummies series alone on this one. This is business, not checkers, web page building, gardening nor puppy training. If you are considering supporting yourself and or your family and a "For Dummies" book is the extent of your research you may want to reconsider things. Not to bash that book too badly, but please don't limit your education to just it.

Just about any semi-seasoned franchise broker or consultant would be happy to offer a "franchising 101" telephone conversation and offer more valuable and current information than the Dummies book does.

The for Dummies book explains, " franchise consultants are paid by the franchises and therefore will only recommend the franchises they represent."..... Well so what? So does your financial planner, your banker, the man that works in the hardware store, the girl at Best Buy - do you steer clear of that stuff just because they may only suggest what's in the store? No one hard sells franchises these days. The industry is too tightly regulated for that. Brokers simply listen to your experience, goals, ambitions, etc. and suggest a few franchises that are in his or her portfolio. If they look interesting he gets you more information and if they don't - oh well. It comes with the desk.

When exploring franchise opportunities keep an open mind. Consider all sorts of brands and business models. A large majority of franchisees end up buying franchises they never knew existed or was available in their market and those suggestions come from people like franchise brokers. If a broker calls - take a minute and talk to them. If you're not interested in their ideas say no thanks and move on.

Franchise brokers and consultants do promote franchising and for the most part their set list of franchises, but don't think that by talking to a broker you are committed to his or her list of franchises, or even any single broker. It's not like real estate where you enter a contract with your broker and cannot speak to anyone else for 6 months without his representation. A good broker will answer your questions, make some suggestions, and certainly ask to show you a few of the franchises he represents. If you find any of his franchises interesting, he's going to offer to introduce you to that particular franchise. Pretty simple and certainly painless.

Franchise brokers and consultants are typically paid by the franchisor, based on commissions of franchises sold, so of course they will offer to show you their franchises - but keep in mind, that broker cannot sell you a franchise even if he wanted to. The franchise has to sell you the franchise. Also, if a broker plans on being in the industry for any length of time, it is equally important to introduce the right candidates as it is the right franchises. The last thing a franchise wants is a broker introducing unqualified, non-interested prospects. Point being there, to contradict the dummies book a bit, success in franchise consulting and brokerage has little, if anything to do with "selling someone" and everything to do with identifying and matching the right entrepreneur with the right opportunity.

A good franchise consultant can offer excellent industry insight, save you hours of research time - and who knows maybe even help get you on your path to prosperity. Even if you choose to go it alone without the use of brokers or consultants, please do yourself a favor and read more than just the dummies book.

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