Why Franchisees Should Consider Using a Franchise Broker

Guest post by: Ed Teixeira
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Franchisees searching for franchise opportunities have a number of choices. The best approach is to use a combination of these choices. By following this approach a prospective franchisee can increase their probability for finding the best franchise for them. A franchise broker can be a useful resource for a prospective franchisee. As a start, let's review where individuals can find franchises for sale.

Here are some sources for finding franchise opportunities:

• The Internet

• Websites that list franchises for sale

• Franchise directories

• Franchise trade shows

• Franchise magazines

• Franchise trade associations

• New franchise openings in the prospects market

and

• Franchise brokers

Properly used, franchise brokers can be a valuable resource for prospective franchisees. The large franchise broker groups such as Franchoice, Frannet, Franchise Alliance and the Entrepreneur Source employs hundreds of brokers. Each of these groups has an inventory of approximately 100 to 200 franchises that they represent.

Their service is to advise an individual about, which franchise opportunity best fits their financial profile and business skills. There is no charge for this service since the franchisors pay a fee for each franchise sold. The franchise fee is the same fee that an individual would pay if they were to purchase the franchise directly from the franchisor since the franchise brokers are paid a commission by franchisors.

When, properly utilized franchise brokers can provide a valuable service for individuals looking to purchase a franchise. The large brokers do not require exclusivity and as previously stated do not charge a fee. There are a number of individual brokers who may charge a fee since their role will be to find a specific type of franchise. Since the majority of individual franchise brokers are free lancers they are not restricted to specific franchises.

Here are suggestions for using franchise brokers:

1. Identify the kind of franchise you're interested in before contacting the broker.

2. Do your home work on the subject of franchising before you get started. There are resources available on the Internet. The FCC, SBA and franchise trade associations provide advice.

3. Be wary of brokers trying to steer you to a particular franchise opportunity.

4. Utilize the broker to gather information regarding the franchises that interests you.

5. Be sure to focus on franchises that are within your financial resources and don't exceed your financial capabilities.

6. Remember that the broker represents a small percentage of the total franchises available.

Franchise brokers can provide a valuable service to prospective franchisees. Be sure you know what type of franchise you want, do your homework and don't exceed your investment capabilities.

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The Traits That Define Good Leadership - By Ed Teixeira

About the Author: Ed Teixeira

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Ed Teixeira is a franchise expert with over 32 years in the franchise industry. During his career, Ed has operated franchise companies in diverse industries. He has conducted franchise transactions in Asia, Europe and South America. Ed is the author of "Franchising From The Inside Out" and has spoken on the subject of franchising in the United States and overseas. Ed is currently the President of FranchiseKnowHow,LLC which operates a website that publishes newsletters for franchisees and franchisors.He also provides consulting services. FKH is located in Stonybrook, NY. www.franchiseknowhow.com Ed can be contacted at 631-246-5782 and at franchiseknowhow@yahoo.com.
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