Franchise Brokers

People often ask me about franchise brokers. On the surface, the idea of a franchise broker seems simple enough. Brokers put buyers and sellers together so whether a buyer or a seller, brokers would seem to be a very important component in the equation.

The fact is, brokers get paid to put buyers and sellers together. After all, they need to get paid too. Thus, by the pure nature of that relationship, they typically have a biased opinion. Odds are, they are representing a party that pays them upon procurement of a sale.

So, let us look at this from both perspectives, the franchisor and prospective franchisee.

For you franchisors or perspective franchisors - Brokers fill a void as a nice additional franchise sales outlet, but do not make the mistake in thinking that brokers are going to be your only source of sales for your franchise company. We have found that companies that sell their own franchises have the greatest success in the long run. The reason for this is that a company selling their own franchises has to live with them for the term of the contract. This causes in house sales teams to have more stringent criteria placed on them.

Thus, my advice is to first deploy an in-house sales initiative. In order to be successful with an in-house sales force, they will need to deploy a marketing program in order to generate leads for those sales people to follow up with. This strategy needs to address the following marketing opportunities:

1. Internet
2. Trade Shows
3. PR / Publicity
4. Print
5. Direct mail

Francorp believes that this multi-pronged approach is the best way to address franchise sales and marketing.

As a secondary plan, brokers can add additional prospects to the equation. Though, be weary of deploying a marketing program and sending all of your leads to outside brokers. I would not recommend that strategy. Your leads are then likely to be distributed among that brokers other franchisor clients in the event that they have a qualified franchisee prospect that is not interested in your particular business off hand. My advice would be to only use brokers that generate their own leads. In addition, be careful not to enter into an exclusive broker arrangement.

For those of you that are prospective franchisees, be weary of brokers steering you to a particular business in which they are obtaining a commission. Not all franchise companies pay commissions. What happens if you work with a broker and they do not show you a particular franchise that you are interested in learning more about? GO DIRECTLY TO THAT COMPANY.

There are many brokers that are great people and and help people find their dream business. Though, brokers are not for everyone. I am not aware of any large national brokerage networks that are paid directly by the buyer. All of the brokers that I have met are paid by the actual franchise companies upon the sale of a franchise. In a perfect world, you perspective buyers should work with a broker for a fee that you pay so that your interests are being represented, not those of a hand full of franchisors.

Now you sellers and prospective buyers are in a better informed position to be able to find the right opportunities that are out there for you all. You heard it here from Francorp, the franchising leader.

Franchising Your Business - David Washington

VMG Vivere Management Group, LLC. Bringing energy, passion, and vigor to your business… INFLUENCE • INTEGRITY • INNOVATION Book Review
Franchising Your Business is the Quintessential Resource
For Growth Expansion in Today’s Marketplace
By J. David Washington


After reading "Franchising Your Business" by Donald D. Boroian and Patrick Callaway, I felt that the veil of the franchising world had been removed. Don and Pat carefully unravel all the myths that surround the world of franchising. One of the most important ingredients to success is to have a winning formula & blue print. The blue print required for success in franchising is mapped out clearly and succinctly in sixteen exciting and fast moving chapters. In chapter one the reader learns the rules of engagement and gets a 30,000 feet view of where the industry was and where it’s heading. Don and Pat have clearly shared gems of wisdom that can only be acquired through vetted industry experience. "Franchising Your Business" is filled with charts, examples of operation manuals, and a very practical franchiseability test to help a business owner to determine where there my stand in becoming the next great franchise success story. Chapter fourteen was very intriguing for me"Going International"; with the globalization of the world’s economy it’s important that one has a balanced prospective on the opportunities and pitfalls that lurk about in the international marketplace. Don and Pat do a good job of sharing their good and no so good experiences in the shark infested world of international business. The eight-step international checklist is a must read and review for entrepreneurs that aspire to expand their business beyond the shores of their local, regional, and domestic markets. Even though I'm not a teacher, this is a well written book based on first-hand experience and industry knowledge I give it an A+! It truly is a "must read" for anyone wanting to go into franchising and really want to expand their business. As a franchise consultant, I recommended "Franchising Your Business" to every prospective client with information garnered from this book you will be at the "head of the class" Clearly Don is a Guru in the world of franchising. Patrick, Don’s grandson merges their experience and prospective in a way to anticipate every thought you would have, every question, and every action you would take as you investigate, start up of your franchise system. Their goal is to equip the reader with "franchise blueprint knowledge." They have achieved this goal and more. If you are thinking of expanding into a franchise, "Franchising Your Business" is the book for you. If your goal was to take your business to the next level through franchising, the secret to success has been reveled in this resources guide, what you want to accomplish in terms of your franchise goals and what you need to know has been made available in "Franchising Your Business An Owner’s Guide To Franchising As A Growth Option". Good luck and many blessing to you on the journey!

www.francorp.com