Authored by Jayant Row in Careers and Employment
Published on 04-16-2009
A lot of business men opt to start their businesses as franchisees. This enables them to piggyback on the successes of an already existing business and brand name and enable them to get into business immediately once they have made their investments and set up things as suggested by the franchisers. The problem however is to find a good franchise. And this is where a good franchise broker comes in.
A franchise broker serves as a consultant to both the franchiser and the franchisee and for a brokerage or small commission acts a link between the two parties till a successful new business is set up by the franchisee.
Being a franchise broker is not an easy business, but can offer very lucrative incomes with very flexible working hours. The franchise broker has to be in touch with his clients who are basically the franchisers who are looking to expand the scope of their business by setting up more franchisees who will carry forward their business. A franchisee will put up the necessary capital; open new sites or offices appoint staff and generally carry forward the business. During this he will have the full support of the franchiser and his team in all aspects of the business for which he will be paying them a royalty and probably part of the profits.
Franchise brokers are employed by franchise companies to sell franchises. They would have to scout around for new prospects in the area they operate and convince the prospect to invest in the franchise. For this he will be paid a commission which may be as much as 50 percent of what the franchisee will pay to the franchiser as a fee.
A franchise broker will have to be trained by the franchises that he offers on all aspects of their products or services and require in depth knowledge of the business of the franchise. It is only then that he will be able to answer the questions posed to him by the prospective franchisee, who is looking for a lot of information before he is convinced to put in his investment. As a franchise broker very little investment is required, mainly limited to some office space, telephones, computers and some staff if necessary. He has to look for potential franchisees and after convincing them that the franchise they are looking at is good, he just turns over this new prospect to the staff of the franchiser and let them convince the franchisee to come on board.
So basically what you would need as a franchise broker is a thorough knowledge of the franchise you are trying to sell, an ability to sell this opportunity to prospective franchisees, and an ability to liaise with both the parties to the extent necessary. Once you are in business as a franchise broker you can decide on the number of franchisers you want to deal with and are comfortable with.
They say that you have to work on at least 50 leads per month if you are to be a good franchise broker. But finding those 50 leads and getting them at least some of them to respond positively to your overtures can be quite hard work. Some franchisers are very particular about the brokers they deal with and do insist on a minimum training and orientation before they allow the broker to deal with customers on their behalf. This may sound arduous, but such care is more likely to result in a sale, than a franchiser who just dumps some brochures on you and still expects you to satisfy the customers whom he does contact.