How to Buy or Sell a Franchise with a Broker
Whether you're thinking of buying or selling a franchise, you face a market of thousands of franchises for sale, which can be overwhelming for the first-time potential investor. Franchise brokers, also called franchise consultants, may be a great resource to you. When starting out, consider what a franchise broker has to offer. Brokers are paid a commission after a franchise sale by the seller and they usually represent hundreds of franchises. Brokers can help buyers by serving as a resource of information on available franchise opportunities and steering them away from bad invesment. For sellers, brokers can help sellers by presenting qualified leads in a very competitive market.
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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 when 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, so may be promoting certain franchises that pay him higher commissions.
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If you are a seller, you also need to consider whether you need a franchise broker or not. Talk to other owners and your company to see whether there is an abundance of your brand franchise on the 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 her if you don't have to. You might want to hire a broker after a few months or trying to market and sell your franchise yourself.
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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 the 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 than others, 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 which companies he represents and what his commission will be. Get references, if possible, from precious sellers.
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