SHOULD YOU USE FRANCHISE BROKERS?

What’s the deal with franchise brokers, and why should I use them?

It’s a question we here all the time, and it’s a very good one. Why should you, a savvy, business-minded individual, pay someone (i.e. a franchise broker) to do something you might be able to accomplish yourself? When it comes to being your own boss and owning a franchise, being anything short of careful and deliberate with how you spend your money can lead to a free fall.

But that’s exactly why business and franchise brokerage firms have become such a popular and important part of the franchising infrastructure today: Utilizing their skills and specialties is as cost-effective as it gets when it comes to buying and selling a business.

On this page, we’ll explain what a franchise broker is, what they do, and why you need them – including a detailed look at the types of clients franchise brokers cater to in order to gain a better understanding of why their jobs are so pivotal.

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What Is a Franchise Broker?

A franchise broker is someone who helps match franchise owners who are selling their businesses to potential buyers, and vice versa. They’re essentially the ultimate networking liaison, and typically have a vast network of companies they represent and connect you to in order to find the right fit for your buying needs. In the same way, franchise brokers assist sellers in connecting with would-be buyers in hopes of finding a quick sale that is as profitable as possible. Franchise brokers take the hassle and inconvenience of buying or selling a business out of the equation for you and expedite the process to fit the needs of their customers.

While there are independent franchise brokers, you’ll typically find them working for brokerage firms like Transworld Business Advisors, where they’ll often represent hundreds of companies and aid in the buying and selling of their franchise units. This is different from a master franchisor, who actively seeks expansion for a parent company. Instead, franchise brokers typically aid in the buying and selling of existing franchise units from one franchisee to the next. But in what circumstances would a customer turn to a franchise broker? It happens more often than you realize.

Current Franchise Owners (Sellers)

Business owners often underestimate how difficult it will be to sell their businesses and overestimate their value. Why? Call it a business owner blindness – they’ve poured so much time and equity into building this business that it’s easy to think it’s worth a small fortune and that people would be lining up at the door to purchase it. But that’s not always the case.

For franchise owners, their business is one of the tallest trees there is, but from a buyer’s perspective, it can be hard to differentiate the forest from the trees. As everything blends together, it becomes harder to stand out, which means you need every advantage you can get. A franchise broker gives you that edge.

Plus, selling your business really is a full-time job in and of itself. But while you’re trying to sell your business, there’s still a business to be run. You have responsibilities on both sides of the fence that can’t be neglected – at least not without coming at the expense of the other.

franchise owner looking to sell his franchise

While you’re still running the business, that’s your income. And your business expenses – like bills and employee salaries – don’t just dry up because you’re moving on. You need to keep the business thriving and draw as little attention to the sale as possible because you don’t want to cause a commotion, which can hurt production and revenue, and devalue your business. But at the same time, you’re working tirelessly to secure the best buyer and get the best possible price for your business. By hiring a franchise broker, you have someone to generate leads who is actively searching for the best buyer, essentially freeing you from the large majority of duties you’d have if you went about selling your business on your own.

By allowing a franchise broker to expedite this process, you can turn your business into a financial asset much quicker – and paying a percentage fee is worth the convenience of not having to do it yourself.

Potential Franchise Owners (Buyers)

Buyers, of course, are on the opposite end of the spectrum. They’re trying to find the few trees that stand out in the forest and struggling to find the right fit in the process.

Franchise brokers help you sift through the over 3,000 franchise opportunities in the United States and find what is the best for you.

With a deeper knowledge of the franchising business and of each of their clients, they’ll be able to answer questions in more depth and detail than the internet will.

Clearly, franchise brokering is an important part of the process. For information about franchising with Transworld Business Advisors, be sure to fill out our form in the side column and set up a meeting with a representative today.