The Benefits of Using a Broker When Buying a Franchise

Navigating the world of franchise ownership can be overwhelming, especially with the vast amount of information available today. For those who want assistance, franchise brokers can play a crucial role in simplifying this journey. By working with a broker, prospective franchisees can save time, reduce risks, and make more informed decisions.

To better understand the pros of using a franchise broker, 1851 Franchise spoke with FranchiseVision Founder and Principal David Busker and Franchising Path Founder Ryan Perry. 

Time Efficiency

When doing research on their own, many candidates may find that the internet is all over the place when it comes to finding insightful and accurate information. This is because of the regulated nature of how franchise companies must deliver information, which necessitates information gates and barriers. 

“This can be time consuming and extremely frustrating,” Busker said. “And oftentimes, candidates can spend weeks researching a company and may even be in discussions with them before finding out the territory isn't available or it doesn't match their budget. A consultant will help you formulate the proper criteria upfront so you're not wasting time.” 

An important part of a franchise broker's role is conducting thorough due diligence on potential franchises, which includes analyzing the financial health and support systems of the business. Having this information  already vetted, while leveraging the broker’s industry insights, can save candidates a lot of time in the process.

“[Franchise brokers] provide support throughout the process, from initial interest to signing the franchise agreement and launching the business,” said Perry. “Brokers aim to make the franchising journey seamless and successful and have a great network and support system you can tap into.” 

Access to Emerging Brands

The franchise industry is constantly growing, with new and exciting concepts being launched regularly. However, many of these emerging brands are not yet household names, making it challenging for prospective franchisees to discover them independently. 

“Without industry knowledge and access to these franchise concepts, a candidate will never know they exist,” said Busker. “A franchise consultant is in the business of knowing all the available and growing franchise brands and spends a considerable amount of time understanding their business models and candidate profiles.” 

Franchise consultants bridge this gap by staying informed about all available and growing franchise brands. They invest significant time in researching and understanding various business models and the ideal profiles of potential franchisees. 

Finding a Better Fit

However, the duties of a franchise consultant go further than simply providing a list of available franchise brands. A consultant can also provide deeper insights into the inner workings of the brands to find one that fits a candidate’s profile.

“You cannot see a brand’s business model on the website, so necessarily you are only looking at their consumer offering,” said Busker. “To really know if a business model matches you, a franchise consultant will do a deep dive into your goals, objectives and develop specific criteria exclusive to you that will help you match to the right business model.” 

This is because franchise brokers spend a considerable amount of time with many franchise brands on a regular basis through research, conferences and one-on-one meetings.

“Brokers offer personalized advice to match each entrepreneur's goals, skills and financial situation, ensuring they find franchise opportunities with strong growth potential,” said Perry. “You can also look for brokers that cater to a specific industry that you are interested in targeting.” 

Professional Guidance

Hiring a franchise consultant is much like hiring an agent in a real estate transaction; their expertise can make all the difference. 

“They are vested in you successfully navigating the due diligence and investigation process,” said Busker. “They may have worked with hundreds or even thousands of prior candidates going through the same process.” 

This deep industry knowledge, combined with access to professional referrals for legal review, financing and other essential services, can significantly impact the successful signing and launch of a franchise. However, it’s crucial to choose a broker who aligns with your goals and understands your needs to maximize the benefits of their expertise. The right broker will not only guide you but also act as a trusted partner throughout your franchising journey.

“To find the right broker who is reputable, you need to do research and look for referrals in your industry,” said Perry. “Look at their qualifications, reviews, success rate and background experience.”

To learn more about franchise brokers, check out these related 1851 Franchise articles:

• Top 8 Franchise Brokerages for 2024
• Franchise Brokers: Fees and What To Expect
• What Is a Franchise Broker? Understanding These Key Industry Players