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Why Franchisees Should Consider Using a Franchise Broker

Guest post by: Ed Teixeira

Article Overview: 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.

Why Franchisees Should Consider Using a Franchise Broker



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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Article Tags: franchise broker, franchise opportunities, franchisees, franchises for sale, prospective franchisee



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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