When searching for a franchise, you may come across a franchise broker, coach, or consultant who offers to help you source and select a franchise, often at no cost to you. This service can be valuable, especially when you need some guidance through the selection process. Still, there's a lot to know about these services. This article will help you learn the basics.
What would it mean to work with a franchise broker?
Franchise brokers can help you start the process of franchise ownership. They can also fast-track you through the early screening and information gathering stages of the process, all without charging you a dime.
Here's the drawback. These brokers are incentivized to help a franchise expand and not necessarily driven to help you find your ideal operation. They are paid a hefty commission (as much as 50% of the franchising fee) for selling franchise units to qualified owner candidates.
While good franchise brokers will ask owner candidates questions about their goals, experiences, and preferences, most use what they learn to determine whether a candidate is likely to help the franchisor they represent profit. Few go further to match interested owners with franchises that suit them best.
Is it better to work with a consultant or coach instead of a franchise broker?
Franchise consultants and coaches have a reputation for being better advocates for prospective owners. Instead of promoting a single franchise option, consultants and coaches will guide you through your research, discovery, and decision-making processes and help you make a carefully considered selection. Here are a few of the actions they might take:
- Providing you with information about the benefits, risks, and constraints of franchise ownership
- Helping you identify the industries you may want to explore
- Offering entrepreneurial assessments that can help you home in on one of your key transferrable skills
- Connecting you with franchises that suit your lifestyle needs, financial goals, and business objectives
- Assisting you in determining your financial qualifications and deciding how much you want to invest
- Guiding you through the steps of the purchase process, which include evaluating terms, selecting a site, and arranging financing
Consultants and coaches can be tremendously helpful when you’re trying to determine where to start, which options to consider, and how any particular option measures up against your investment goals. However, it’s important to remember that they, like brokers, work on a commission that’s paid by franchisors. They may be incentivized to direct you to franchises that pay large commissions over ones that don’t.
Do I have to pay for their services?
In most circumstances, you do not have to pay for their services. The franchise organization they represent covers the cost of their service.
What are their qualifications?
Franchise brokers, consultants, and coaches aren’t required to hold licenses or meet a set of criteria to offer their services. Many begin working in these roles because they have extensive knowledge and experience in franchise ownership as either a franchise unit owner, franchise executive, or regional developer. Their knowledge and experiences make them useful guides as you decide whether to pursue franchise ownership.
Can I buy a franchise without their help?
Yes. Almost every franchise has a team in place that helps prospective owners learn about their business and work through the application and agreement. But while you aren’t required to work with a broker, consultant, or coach to start a franchise unit, you could benefit from their services, especially those that help you clarify your objectives and goals.
Whether you choose to work with a franchise broker, consultant, or coach or go it alone, it can help to have a non-biased team in place that will help you decide which options to pursue. Your team should include the following professionals:
- A financial planner who can help you determine what you can afford to invest and leverage in a franchise opportunity
- A qualified certified public accountant (CPA) who can help you assess the financials and future viability of any franchise you consider
- An attorney who can help you review the terms and conditions of a franchise agreement
Interested in connecting with a franchise consultant? Consider working with one of these teams of experts:
There are lots of steps involved in sourcing, evaluating, and buying a franchise unit. We can help you through the process. Log into your owner’s portal for articles, checklists, and advice you can use to start your search and make your venture a success.