Pros and Cons of Hiring a Franchise Broker

If you or somebody that you know is interested in buying into a franchise, you may want to consider hiring a franchise consultant or broker to help you choose which franchise is best for you.

There are hundreds of successful franchises in the United States, from burger joints to senior care franchises, so it may be hard to make a decision on which industry to invest in.

Franchise brokers act as middle men or intermediaries between the company that owns a franchise and a prospective franchisee. Keep on reading for a few pros and cons about bringing in a franchise consultant to help you make your decision.

Pros

Free Service – Usually the services of a franchise broker come free of charge, with the franchisor paying the broker’s fee after a franchisee buys into their franchise.

Experienced – A good franchise broker will have experience in a wide variety of industries. Make sure that you ask him or her the various industries that they have consulted in, and ask them if they have experience in a few industries you are interested in.

Avoid Losing Money – Your franchise broker will should be able to let you know whether or not the company you are looking at presents an opportunity to make money and succeed, rather than lose money and fail. This, obviously, is very important. You will not always be able to tell if a franchise is a good investment simply by reading their franchise marketing material.

Cons

Brokers are Salesman – Don’t forget that at the end of the day, your consultant will be compensated by the company that you choose to go with. This means that your broker will probably try to sell you hard on a few business models that he or she has found successful in the past. The industries that these businesses are in may not be the route that you want to go, so don’t be pressured into making an investment you are uncomfortable with.

Limits – While working with an experienced broker can be very beneficial, it will limit the number of franchises that you can choose from. If your broker doesn’t do business in the senior care franchise industry, he or she won’t have any information for you to digest in order to make a healthy decision for you and your family. 

Keep in mind that the final decision on investing in a franchise is entirely up to you. If your broker is pressuring you or isn’t living up to their end of the deal, look elsewhere.