Brokering Relationships: How SMB Franchise Advisors Connects Emerging Franchisors with the Franchise Broker Networks

SMB Franchise Advisors works to cultivate relationships between brands seeking franchisees and franchise broker networks who can help them find those candidates.

Thanks to decades of experience in the franchising industry, SMB Franchise Advisors is making the connections for their clients to be accepted into broker networks and provide their clients with guidance on how to use those broker networks best in order to grow their franchise system.

“One of the ways that's very popular in today's times is to sell through the broker networks – some of the biggest ones are FranNet, FranChoice, FranServe, FCC (Franchise Consulting Company), IFPG, The Entrepreneur Source, The You Network and then there are others, who may specialize in a particular area of focus,” Steve Beagelman, President and CEO of SMB Franchise Advisors, said. “We have relationships that we've built through the years with each of these groups.”

An advantage of working with SMB Franchise Advisors, Beagelman said, is that emerging brands just starting out in the process of franchising their businesses will be better positioned to charge higher franchise fees.

“A lot of franchisors will establish a higher initial franchise fee when they go into the broker networks. A lot of these networks today charge an upfront fee to get in and/or a monthly fee to work with them for their services. We have the relationships to introduce our clients to the right networks at the right time,” he said.

One brand that has seen success through SMB Franchise Advisors is Monster Tree Service. Founder and owner Josh Skolnick is thrilled by the connections SMB Franchise Advisors has helped his company make with franchise broker networks.

Franchise broker networks Monster Tree Service has been able to work with thanks to introductions made by SMB Franchise Advisors include FranNet, FranChoice, TES, IFPG, FranServe and FBA, Skolnick said.

“They made the introductions and sort of sponsored you in,” Skolnick said. “The franchise community is a very small community, and a lot of it is about who you know. They were able to endorse me to get into the initial networks, which helped us with scalability and experience and professionalism. This allowed us to get involved in higher-end networks, and now we’re involved in every franchise network across the United States.”

For Skolnick and his team, the major value of partnering with these franchise brokers is the quick turnaround time. Franchisee candidates who come through broker networks, Skolnick noted, have been prepared for what the process looks like for buying a franchise. This helps make for a more efficient sales process, as Skolnick and his team end up spending very little time weeding through unqualified candidates.

“For us, being the rapid pace that we’re growing at, our time and energy on the sales side is able to be focused with good, qualified candidates,” Skolnick said, adding that such candidates must meet the criteria from minimum liquidity and be the right personality to be involved in the business.

Skolnick views SMB Franchise Advisors as a gatekeeper. He takes ownership of the franchise broker relationships once he and his company have been introduced.

“We pay the broker networks a fee to make the introductions but then it’s up to me,” Skolnick said. “I had to begin the networking and spend the capital and time and energy traveling to make sure we networked with individuals to make sure they knew Monster Tree and bring them up to speed on what we do. I was definitely satisfied. If I was starting all over again with no experience in franchising I would have no hesitation in working with SMB Franchise Advisors again.”

Beagelman commended Monster Tree Service and their efforts to network with broker networks, which not every brand does.

“Monster Tree Service is doing well in the broker networks, but are also using third-party groups to outsource their sales,” Beagelman said. “They go to all of these conferences and make themselves known. You need to fully engage like that to have the best chance of success with the brokers. However, it's not for everybody.”

Ultimately, the relationships brands form with broker networks is up to the brands themselves. Beagelman noted that it can be difficult for a brand to grow its franchise footprint without the help of a broker network.

“The broker networks are only as good as you make them,” Beagelman said. “If you don't go to their conferences, if you don't reach out to the brokers, if you don't build those relationships, then don't expect them to work for you. You have to reach out to brokers to make sure that clients are top of mind and that the brokers understand the investment that brands have in making the partnership a success.”

For this reason, SMB Franchise Advisors also plays a crucial role in matching the right broker network to the right brand.

“I've called in favors and gotten clients approved in networks where they may not have entertained them,” Beagelman said. “We certainly do reach out with our relationships, but we also guide our clients to which networks are the best fit for them. We advise them based on what they want to do and how it fits their size and budget.”

Beagelman said that many broker networks want to work with brands nationally, so brands that are looking to grow regionally, at least at first, may not be the best fit for some particular broker networks.

“However, if you want to grow fast, the broker networks are a good fit,” Beagelman said. “They tend to do better with lower investment levels – between $50K and $300K. They also do very well with semi-absentee models. If you're telling me that a business is an owner-operator and is a high investment, it's not going to be a concept that is going to work as well in the broker networks.”

Broker networks also want to make sure they send their leads to the right brands, ones with good franchisee validation. For this reason, Beagelman said, brands need to be prepared.

“If it's not in a good place, the broker networks won't want to show your concept,” Beagelman said. “So, it’s important to make sure that you are ready for the brokers to be able to sell your concept. Brokers do not get paid until the potential franchisee purchases a franchise. So, if a brand isn’t able to close those sales, then they will redirect their attention to other franchises.”

Of course, the concern goes both ways. Brands need to make sure the broker network they work with is providing value.

“You need to examine your relationships with the broker networks at least every four to six months to make sure that it's working for you,” Beagelman said. “You usually sign a contract, so if you're paying a fee, you need to make it work."