-
Step 1
Consider what a franchise broker has to offer. Brokers are paid a commission after a franchise sale by the seller. They usually represent hundreds of franchises. Brokers can help buyers by serving as a resource of information on available franchises and steering them away from bad franchises. Brokers can help sellers by presenting qualified leads in a very competitive market.
-
Step 2
If you are a buyer, consider whether you need a franchise broker. In most cases you have nothing to lose by speaking with a broker while you are looking for a franchise opportunity. If you know what you're doing or are committed to a specific franchise, you probably don't need a broker. If you do use a broker, keep in mind that like a real estate agent, the broker does not work for you and some may be promoting certain franchises that pay him or her higher commissions.
-
Step 3
If you are a seller, consider whether you need a franchise broker. Talk to other owners and your company to see whether there is a glut of your type of franchise on the local market. If this is the case, you may need a broker. Obviously you don't want to hire a broker and split your franchise fee with him or her if you don't have to. You might want to hire a broker after a few months or trying to market your franchise yourself.
-
Step 4
Contact and sign up with a franchise broker. Buyers will not be obligated to buy from the broker. Buyers should ask for a review of franchise opportunities in his or her area. Ask for a full list of businesses the broker represents. The broker will ask you for information to verify that you have the financial resources to purchase a franchise. Some franchises will require larger financial commitments, so the information you provide will help the broker refer you to franchises you can afford.
Sellers should try to speak to more than one franchise broker before signing a contract. Check out who they represent and what their commission will be. Buyers only pay a commission if the broker makes a sale. Get references if possible from precious sellers.
