What is a Franchise Consultant or Franchise Broker?

[dondasz]

Why would someone seek the services of a franchise consultant or franchise broker?

A potential business owner that has an interest in purchasing and running a franchise would benefit from the services of a franchise consultant. A franchise consultant can provide expertise and guidance throughout the entire process. Listed below are many of the numerous reasons that it is advantageous to use this service.

• The service is free to the franchisee, with the franchisor covering the consulting fees.
  
• The service is personal and confidential.
  
• The consultant guides the potential franchisee through the entire process of deciding whether to become a franchisee, and how to go about it.
  
• A detailed profile including an evaluation of the potential owner's experience, interests, and goals is complied in order to match the new franchisee with the most suitable opportunity.
  
• Education is provided on the various types of ownership and investment options.
  
• Investigation into the most suitable opportunities that are available is done by the consultant.
  
• Initiation of contact with company representatives is part of the service.
  
• The consultant helps to verify each company's success and track record.
  
• The potential business owner saves time and money by having the experts perform research on various opportunities.
  
• The consultant acts as the one-stop shop, answering questions and referring the potential owner to other resources as necessary, such as financial or legal advisors.
  
• The consultant works with all types of franchises, including full-time, part-time, new units, and re-sale franchises.
  
• Consultants are fully trained by their company and work similar to independent real estate agents, providing a full service package.
  
• Complications and confusion are virtually eliminated by having an expert perform these services.

Overall, a franchise consultant will help you determine if franchising is right for you and if so, what type of franchise in which you are most likely to succeed.

Click Here to contact a local franchise consultant for a free franchise consultation.

[jumper666jr]

what are the fees based on. if intered please PM me.

[dondasz]

There are no fees to the buyer of the franchise. The franchisor pays the franchise broker a finders fee. Most franchise brokers represent hundreds of different franchises.

[freeman]

Never, ever take the advice of any person on commission. It is a direct conflict of interest. They'll all try to tell you the franchiser pays the fee, but buddy "you" are the one paying the fee. If the franchiser can pay them a commission then they can reduce the fee if you push.

they are in the business of separating you from your money, don't ever take their opinions over your own research and gut feelings, never. Do your home work!

Validate with "Every" franchisee they have. It is a fact that most people will be steered towards one or two "singers" and then stop their investigations. Every franchisor has a singer or two that they rely on..they don't all stay singers and the franchisor has many incentives to keep em rotating.

First look to the UFOC and identify the closed units, contact those people first. Not every closed franchise will ever be listed in the UFOC as it is only required to be update every year. A bad turn in a company won't show up for 12-14 months and by the time you catch it , well its too late.

Call them and ask them one simple question "would you do it again"?

It will disarm the singer and you'll likely get an honest response

[bizdev]

Freeman gave some excellent advice.

If you are in the market for a franchise you don't need a consultant. The consultant will steer you to the franchises that are paying them to sell their franchise opportunities. They will tell you their job is to match you up with the franchise that is best for you, which of course will be a franchise that they are working with.

You can and should do your own research. It's easy with the Internet and dozens of magazines readily available. When you narrow it down to a few that really catch your interest and fall within your budget, request the UFOC. Then you can really dig deep. Like Freeman said, make those phone calls. Call current and previous owners. And don't make the mistake of asking for just their sales figures. Sales don't translate directly to profit. Try to dig for info regarding ongoing monthly expenses and try to determine profit potential. How long did it take to reach break even?

I owned a franchise (retail) and I offer loads of tips and advice in my start up kit (below).

[Pat88]

With franchise brokers, it's buyer beware!

A franchise broker is a paid franchise salesperson. Many franchise brokers claim they will help find a franchise company that is the perfect match for your background and abilities, and that their service is free. In the beginning it all sounds good. There’s some personality testing and review of personal finances. At the end of the day, it turns out they only represent a handful of small franchise companies you’ve never heard of before. A detailed analysis often reveals these highly touted franchises produce mediocre or even below minimum wage financial performance. Yet franchise brokers don't mention this, and individuals continue to rely on their recommendations, believing the broker represents them. Nothing could be further from the truth.

Franchise brokers receive a substantial commission up to 50% or more of the franchise fee you’re paying the franchise company. Franchise Broker Realities: (1) Their service is definitely not "free" despite these and other similar misrepresentations. It's really common sense - how could anyone offer a "free" service and survive in business? The simple truth is if you buy one of the franchises they're hawking, your money goes to the franchise company, then into the broker's pocket. If anyone ever calculated how much time they spend to collect their $15,000 or $20,000 commission, it's probably more than a brain surgeon earns. (2) Franchise brokers definitely do NOT have your best interests in mind. They will do or say whatever they have to in order to close a deal and earn their commission.

There's a great article by a franchise attorney and international franchise expert discussing this. There's an article that also includes a lot of tips for evaluating any franchise on the franchisefoundations website (under Articles II).

[FranOption]

every one here seems to have some strong opinions about franchise brokers and I have read numerous post saying you have to pay and that they are sales people. That is not quite true I am not here to say every broker is good but look at the facts. Franchise consultant are here to streamline the process for us and make the process as informative and as easy as possible. The first franchise I bought I used a broker. And I can only say positive things about him and what he did for me. and no I did not pay anything but I gain a lot of knowledge and he was there everystep of the way.