BUYING A FRANCHISE
The choice of whether or not to buy a franchise is one of the most critical financial decisions that you can make. For this type of important “life” decision, it makes sense to have an expert advisor guide you, the potential buyer (the “franchisee”), through the purchase process. Just as informed real estate brokers help people find the right home, franchise brokers can match you with a franchise that will fit your lifestyle.
Although most franchises are sold directly by the parent franchisors, there is a growing set of professionals that are consulting and brokering franchise opportunities. Their services are usually free to the buyers — brokers earn their money via commissions paid by the franchisor.
Working with business brokers or franchise consultants for the purchase of a franchise business involves several steps. First, they will consult with you to determine your needs, skills, and available capital. Once they have a good understanding of your finances and goals, they will recommend a few companies that they think will be a workable fit based on your interests, financial qualifications, and the current market. Then they will put you in touch with the franchisor directly.
Advantages of Using a Franchise Broker or Consultant
There are several advantages to using a franchise consultant when considering franchise opportunities. These include:
- From industry experience and extensive contact networks, a franchise consultant can introduce you to franchise opportunities you aren't even aware of and would possibly never find on your own.
- Franchise consultants pre-screen franchisors, making sure that the companies they represent are responsible and financially fit, and can put the specific franchise opportunity in perspective with other potential opportunities.
- They will help you create and deliver your purchase proposal to the franchisor. A good franchise consultant fully understands the franchisors requirements and how to best position a potential franchisee for success.
Some brokers are focused on particular industries, which can be an advantage if you are sure that you want to operate in a particular field, but beware of limiting potentially lucrative opportunities because you didn’t explore all of your options.
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