When buying a franchise, a franchise broker can provide invaluable assistance and guide you every step of the way.
Investing in a franchise opportunity can lead to a range of emotions from the initial excitement of becoming a business owner to anxiety caused by not immediately knowing if this was the right decision.
These are both normal emotions experienced by aspiring entrepreneurs as they look to realize their dreams of becoming franchise owners.
One way to ease the anxiety associated with purchasing a franchise is by enlisting the services of a franchise broker.
Having a franchise broker with the knowledge and experience to guide someone through the franchise purchasing process by providing a systematic, methodical approach that can help mitigate their risk.
With so many franchise opportunities available, it is critical to ensure anyone interested in purchasing a franchise meets that franchise’s requirements and is matched up with a business that is tailored to their experiences, personality, and business goals.
Let us take a look at how a franchise broker can help with buying a franchise.
Franchisee Qualifications
One of the most important steps for a franchise broker in matching an aspiring business owner with a compatible franchise is getting to know the future franchisee on a more personal level.
Amongst the key areas a franchise broker will focus on to help understand compatibility include:
- Business Experience – Although having a high level of business experience is not necessary to become a franchise owner, a franchise broker must be aware of how much business knowledge an individual possesses. This may help determine if an emerging or established franchise brand may be a better fit. The experience of the franchise brand, their franchisees, and the franchise corporate office role are all part of the selection process.
- Industry Experience – Learning about the aspiring business owner’s previous industry experience will help a franchise broker narrow down opportunities according to the industries that are most familiar.
- Financial Status – Understanding an aspiring entrepreneur’s financial status allows a franchise broker to offer compatible franchise opportunities. The initial financial investment can vary a great deal depending on each franchise opportunity, which makes it extremely critical to understand when considering franchise funding options. A franchise broker has relationships with financial partners who specialize in funding franchise businesses.
- Business goals – Understanding the business goals of the future franchisee can go a long way in matching a compatible franchise opportunity. Whether the goal is maximizing profits, expanding a portfolio, or making a difference in their community, having this information available can give a franchise broker the ammunition they need to narrow down which franchise opportunities are best suited for obtaining these goals.
- Personality – Understanding the personality traits is key in determining which franchise opportunity best suits a person’s temperament. A franchise broker has access to assessment tools to understand a buyer’s core strengths. Who are the customers, how many employees will they need, are the employees highly skilled, or do the customers come to the franchisee or does the franchisee go to them? These are just a few examples of matching the personality of the buyer to the specific franchise model.
Franchise Evaluation
Researching and taking the steps involved with evaluating a franchise opportunity for a franchisee takes time and patience.
There are many factors to consider when determining which opportunity best suits a candidate and how best to set them up for success.
Here are some of the factors to consider during the franchise purchase process.
- Franchise Fees and Setup Costs – Owning a franchise would not be possible without paying the upfront franchise fees, which are used to gain access to the franchisor’s business systems, training, and support. These initial fees can vary a great deal depending on the franchise opportunity so it may be necessary to explore funding options to help future business owners pay for the initial setup cost.
- Ongoing Cost – It is important to understand the working capital necessary in both direct costs and overhead. The franchise company and franchisees can help with this very important information critical to the long term health of any business.
- Brand Recognition and Growth – Oftentimes a buyer may think brand recognition is the most important factor to success. This is heavily dependent on the industry. A solid brand can help retain a customer base and expand the overall customer network, regardless of brand recognition. A franchise broker can provide insight on the value of brand recognition to various industries and how that may or may not affect the growth of the brand.
- Support Systems for Franchisees – To be successful in a franchise business, the franchisee must have a strong support system to help them navigate through the many aspects of owning a business. A franchise broker can shed light on differences of support, depending on the age of the brand and industry. It is important to understand the depth of support provided, which can include corporate system support, training, marketing assistance, and financial management services . These are just some of the components of a great support system, and areas that vary between franchise industries and brands.
- Time Commitment – Owning a business takes hard work, dedication, and a solid time commitment to help the business get off the ground. The time it takes to launch a franchise varies, depending on the industry. A franchise broker can help educate a buyer about different franchise models and industries and how they vary with an owner’s expectations of time needed to launch the brand.
- Competition – With so many businesses covering a city or town landscape, it is inevitable there will be competition for customer business. A franchise broker will know who the competition is and the differentiators of their brand. Successfully understanding and handling competition is a big step in keeping a business afloat and competitive in an aggressive market. A franchise broker often works with many franchise clients that are in the same industry and can bring value to the buyer because of this knowledge.
Buying a Franchise? Let a Franchise Broker Help
The decision to purchase a franchise can be very intimidating without the assistance of an experienced and knowledgeable professional like a franchise broker.
Having access to someone who can guide you step-by-step through finding a franchise match and answer any questions or concerns can make the process infinitely smoother.
Most importantly, a franchise broker can help find a compatible franchise fit that matches someone’s strengths, ideas, personality, and business goals, which can increase the chances of a more rewarding and meaningful career as a franchise owner.
