A person interested in purchasing a franchise may decide to use a franchise broker to help them choose the right franchise. There are many pros and cons to using a franchise broker.
What is a Franchise Broker?
A franchise broker (also known as a franchise consultant) is an individual who acts as an intermediary between the franchise company and an individual interested in buying a franchise. In most cases a franchise broker is not directly employed by the franchisor and represents many different franchises.
Pros
- Free service - This service is free. The franchisor pays the franchise broker at the time you buy your franchise.
- Experienced professional - Franchise brokers already have experience dealing with the franchisor since they have been down this road before.
- Profile - A franchise broker will evaluate your experience, interests and goals to help you understand and decide which franchise is right for you.
- Avoid a bad investment - A franchise broker can help you avoid buying into a franchise system he/she knows is a bad investment.
Cons
- Limitations - Using a franchise broker will limit the amount of franchises you have to choose from. Most franchise brokers represent hundreds of franchises, but there are hundreds of other franchises available.
- Franchise brokers are salesmen - Remember, franchise brokers only get paid if you buy a franchise. If you feel pressured, your broker may be pushing you to buy so he can obtain his commission.
