By Suzanne Musial

Franchise brokers: Who are they, and do you need one?

The best travel agents ask a lot of questions of their clients before planning a trip. The more they know, the more they can match the right experience to the client. Good franchise brokers are the same way. Their job is to learn all they can about a franchise candidate and then match that candidate to a franchise, based on their deep knowledge of the vast franchise landscape.

Using a franchise broker

Sometimes called “business coaches,” “advisors,” “referral sources” or “franchise consultants,” franchise brokers can be an invaluable asset when hacking through the franchise jungle. According to Linda Menter, vice president of business development at FranChoice, a franchise consultancy, it’s about minimizing risk and saving time.

“There are more than 3,000 franchises out there to consider,” Menter said. “The broker’s role is to help screen through the opportunities, narrow down the choices and help the candidates avoid mistakes that come when a prospective franchisee falls in love with a widget.”

Falling for a certain franchise concept isn’t necessarily a mistake, but it can blind the prospective franchisee to key questions he should be asking. Often, the broker is there to help protect the franchisee from himself.

“That widget the candidate falls in love with might be good or it might not,” Menter said. “A good broker will help guide you to study the business, the ownership and study yourself to make sure it is a good fit.”

Buying a franchise: How do brokers match you up?

Like any investment, buying a franchise business carries risk. Using a franchise broker does not remove all the risk, but it can help minimize it. However, it is important for someone buying a franchise to be as diligent about the broker he works with as he is about exploring franchise opportunities. There are brokers out there who will represent any franchisor willing to pay them a commission for a sale.

“Unfortunately, there are no barriers to entry in becoming a broker,” Menter said. “Anyone can hang out a shingle, and there are some bad apples out there. A candidate really must investigate a broker’s experience in franchising and in business. Check their references.” Once you’ve completed your due diligence and you connect with a franchise broker whose experience and reputation checks out, the information gathering process begins.

“It’s exhaustive, to say the least,” Menter said. “We spend hours and hours before we even think about suggesting a franchise. We want to know goals, motivations. We want them to understand the pros and cons of franchise ownership. How committed are they to devoting their lives to the business? Are they good managers? Do they work well with employees? All of these things help us match their characteristics to the characteristics of the franchise.”

Who pays the broker for all of this work?

Those buying a franchise business do not pay the franchise brokers. Franchisors do, viewing brokers as a marketing expense in order to get qualified candidates.

Part of your due diligence in choosing a broker should include understanding how the broker gets paid. Some get a flat rate regardless of the price of the franchise they sell. Others earn a commission based on the cost of the franchise, an arrangement that could motivate a broker to suggest more expensive franchises to candidates. It’s your obligation as a candidate to sniff out a broker’s intentions.

It’s worth noting that a broker who brings franchisors unqualified leads or candidates who are not a good match will not last long as a broker. “We are valued by franchisors for one thing—because we introduce them to qualified candidates,” Menter said.

By that measure, a franchise broker with an established record and a long history is a fairly sure bet.

Pros and cons of working with a broker.

Time savings is one of the best reasons to use a broker. There are literally hundreds of thousands of pages of information and data to wade through if you were to dutifully examine all the franchise choices out there. A broker cuts through the clutter to point you in the direction of the handful of opportunities that could be a good fit.

Money savings can be substantial if a broker steers you away from a franchise concept that would have been a disastrous match. That alone can be a compelling reason to use a broker for some candidates. Those who are completely new to franchising are also typically grateful to have the broker’s expertise in their corner.

Ratios of success must also be considered as a positive attribute of using a proven franchise broker. “As a franchise consultant, naturally I feel we are very successful,” Menter said. “But truthfully it is a complicated dance, and there are no objective measurements. However, when we speak with the franchisors with whom we work, it’s common for them to tell us the franchise candidates we bring to them usually end up being their rookies of the year.”

The greatest “con” of using a broker, as Menter pointed out earlier, is the absence of a barrier to entry. You have to be alert to avoid the unscrupulous actors whose only motivation is to collect the commission on the sale. Verify their credentials, scrutinize their track record. And even if you are certain you have a great broker, don’t rely solely on the information he or she supplies. Check and double check sources, earnings claims, and talk to existing franchisees. Additionally, your accountant, your attorney and trusted family and associates should review all documents.

So what’s the takeaway? Don’t settle.

Buying a business is a huge decision and typically filled with emotion and stress. A franchise broker can be a beneficial ally in easing the indecision and anxiety and helping guide you to your ideal fit.

“It is quite common for candidates to look at franchise companies and see a lot that they like and see things they don’t, and they feel they have to settle,” Menter said. “However, if you have done your due diligence and have a clear vision of what it is you want, you should not have to settle. A good, solid franchise broker will eventually bring the perfect match to you.”

Find a franchise broker to help you get started today.

Let’s face it leaving the security of your job to go into business for yourself can be downright scary. In fact, it can be scarier than that first time you took your parents car out of the driveway without a co-pilot. But whether you are buying a business or taking that first solo foray onto the freeway, once the fear is dealt with, the risks soon begin to diminish in your mind.

“Action breeds confidence and courage. If you want to conquer fear, do not sit at home and think about it. Go out and get busy.” —Dale Carnegie

 Too often, we allow fear to justify the inaction that eliminates risk. Risk can be managed to produce results. Inaction can never produce results. So how does one, when making important decisions, overcome the natural tendency toward fear?

I have always thought that, in business, there are three types of fear that get in the way of decision making: Fear of Change, Fear of Failure, and Fear of Self.

Fear of change. It’s the fear of that first cold shock as you dive into a swimming pool. Before you get in, you might walk around the pool several times testing the water with your hand. Next you sit down at the edge of the pool and first you put one toe in and then your foot and after a few minutes you drop in up to your waste. The minor discomfort of adjusting to the water temperature prevents you doing what you actually WANT to do!  You fear only the change, not the result. Meanwhile everyone else just dives in and the shock is over with in a blink.

If you are considering change, you have reasons. Those reasons are compelling, or you wouldn’t be considering the change. Focus on your desire to change. Don’t succumb to fear and fall back into indecision.

“By changing nothing, nothing changes.”-Tony Robbins

Fear of Failure. It always amazes me that most people think of failure as something soul crushing and life ending. Anyone who is successful will tell you that the key to success is …failure! It’s true.  An old proverb says:

“Take risks: if you win, you will be happy; if you lose, you will be wise.”

You will fail in business. You will fail during the first transaction. But it will be the last time that you fail at that. And you will go on to fail again and again, all the while building an inventory of practices that have been perfected by failure.

 If you are afraid to fail, your successes will be few, common, and unmemorable.– Lorii Myers

Fear of Self. The thought that it takes someone better than you to succeed is completely self-defeating. Before General US Grant’s first Civil War battle, he found himself terrified of meeting the enemy. But as he approached the enemy’s location, he found it had been abandoned. Grant realized that Confederate Colonel Thomas Harris was “as afraid of me as I was of him.” Grant would write later, “From that event to the close of the war, I never experienced trepidation upon confronting an enemy.… I never forgot that he had as much reason to fear my forces as I had his.”

Don’t sell yourself short. Others do not possess mysterious powers that you lack. If you have a track record of success in your career or in life, you are just as likely to succeed at starting up a business as the successful entrepreneurs that you hope to emulate.

“If you hear a voice within you say you cannot paint, then by all means paint and that voice will be silenced.” ― Vincent van Gogh

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Fear is real, but it is merely an obstacle to be overcome. Change is destiny, failure builds strength and you have the power to succeed.

Video: Resell your clothes in Columbia!

OnlyFranchises. com client Suzanne Delica talks about her Clothes Mentor Franchise on Baltimore’s WBAL TV.

Benetrends

MAR 27, 2017 | Author Molly Klein

Increasingly, American workers are choosing to leave the corporate world and venture forth on their own. These voluntary departures are being fueled by an increasing optimism in the country’s economic outlook, a desire to have more professional independence, and the appeal of being their own boss.

It is worth a closer look to determine why workers are escaping the cube. Why, when, and how workers leave corporate America to pursue entrepreneurial ambitions are complex and important issues to consider.

According to the March 2017 figures released by the U.S. Bureau of Labor Statistics (BLS), nearly 3.2 million people voluntarily left their positions in January 2017. The number of “quits,” as BLS refers to these voluntary departures, grew throughout the private sector, particularly in services, finance and insurance, and real estate.

The January 2017 data reflects an uptick from figures that were consistently between 2.9 million and 3 million monthly “quits” from August to December of 2016.

Economists generally consider “quits” an indicator of healthy optimism, as a good number of those who leave choose to start their own businesses.

Why Leave?

Many employees who choose to leave a corporate gig do so for the freedom and flexibility afforded by starting a business. In addition to the wealth potential, running your own business gives you the opportunity to be more in control of your destiny.

For many, the choice to leave a seemingly secure position in corporate America may seem like a risk.  But in many cases, the climate and culture in the corporate world leaves a bit to be desired. Here are a number of other reasons people are choosing to leave the nest:

1. Office Politics. The nastiness of office politics is a headache that can be avoided when you serve as your own boss.  You will no longer be burdened by coworker infighting, pressured to cater to the whims of a difficult boss, or forced to be a pawn in someone else’s chess game.
2. Career Control. With a corporate job, workers are not always in control of their own career path. The opportunity to be promoted and advanced, learn new skills, or be given valuable work experiences is often at the whims of a supervisor.
3. Declining Benefits. In most areas of corporate life, the notions of company-provided pensions, reliable health care, and other benefits are long gone.  More of those costs are being passed on to the worker.
4. Loyalty. In years gone by, companies earned the loyalty of their employees, providing them with the opportunities and security that allowed for long, productive careers with one company. But today, some corporations no longer value loyalty, and workers have to cope with ever-looming threats of layoffs and downgraded opportunities.

While not everything about corporate America is doom and gloom, there is certainly a great deal of dissatisfaction that employees are feeling about the work being done and the way they are being treated. There is significant appeal to the notion of giving up that corporate life and considering a different type of career.

Should You Consider a Change?

There are many reasons why you might consider leaving your job. But the real question is whether you are ready to make a change. What factors should you consider when it comes to making a major professional transition?

The answers are not always obvious. You need to spend the time to consider if you are dissatisfied with your current situation and if the answer is yes, why you are dissatisfied.

The decision to leave a corporate job is not one to be taken lightly. If you choose to make the leap, there are some things that you can do to make sure the switch is done smoothly and professionally.

The first thing to do is assess whether you are truly making the right choice. Ask yourself what is missing from your current work situation. What are you going to escape to if you leave? What are the opportunity costs to staying or leaving?

Here are some points to consider during the assessment:

• Are you happy? Do you experience joy and relish the work you are doing? Job satisfaction is a powerful motivation. It can provide you with a sense of fulfillment and a feeling that you are part of a greater good. But not feeling that way can leave you with an emptiness that needs to be filled.
• Are you inspired? Do you work with and for people who motivate you and whose company you enjoy keeping 40 or more hours a week? You want to be with people whose work, collaboration, and intelligent thought helps to get work done. You deserve a sense of teamwork and camaraderie. You need a leader who rallies and motivates. If you do not have that situation, perhaps you are the leader who can inspire others.
• Do you love your work? You spend years of your life at work. You deserve to live a life that is fulfilling and enriching, and that brings you joy and happiness. If you are not feeling those things, it just might be time to venture forth on your own.
• Have you stayed too long? Do you have a sense of “been there, done that” with your work? Are you bored? If the answers to these questions are “yes”, you may have outgrown your job. That is okay. It just means it is time to look at different opportunities.

Next, create a path for your departure. What steps do you need to take to be ready for what comes next? These steps may include additional training, skills development, due diligence on a potential entrepreneurial venture, resume updating, or additional networking.

It is likely that these steps can be taken while you are still employed. Taking the time to acquire what you need in the way of skills, information, advice, and capital while still earning a paycheck is a smart idea. It allows you to explore and, perhaps, change that path before making a career leap.

Finances are a major consideration for anyone looking to leave the corporate life. You need to consider how you will support your lifestyle and pay the bills, while at the same time determining how you will cover the costs of a potential start-up venture.

You need to make a budget, a comprehensive business plan, and do the math. Are there living expenses that can be cut, at least temporarily, once you leave? Do you have enough savings to support you and your loved ones? Is there a spouse or partner who will continue to have health insurance and other benefits to provide the security and peace of mind you need, especially when starting a new business?

Overcoming Obstacles

When you choose to leave a job, you are inevitably going to face several obstacles. Knowing what these obstacles are and understanding how to overcome them are important steps as you prepare. Here are three of the biggest obstacles and what to do about them.

1. Financial Reliability. To be honest, there is one considerable advantage to working for a corporation. You know you will be getting a steady, reliable paycheck. You can count on this income to pay your living expenses, entertain yourself, and put away savings for rainy day emergencies or your entrepreneurial dream. That is one of the biggest reasons to do the planning and due diligence while you are still employed. You may also be able to start your own business, at least part-time, while you are still working a full-time job. While this can be onerous, it will provide you with confidence and financial security.
2. Increasing Debt. Consumer debt such as credit cards, car payments, and student loans can be, well, consuming as you consider what to do when you leave the corporate bubble. Before you leave, you should do everything in your power to reduce or eliminate these debts from your portfolio. Not only does this lessen the anxiety and strain of a new venture, but it also takes the pressure off of your initial income needs when you go out on your own.
3. The Skeptics. Friends, family members, and coworkers may look askew, frown, or vocally criticize your choice. Skeptics abound, especially among those who are more risk-averse. This is a natural reaction and it is a good idea to not take these skeptics’ words too personally. The best way to overcome these skeptics is to provide them with information about the reasons you are leaving the corporate world, the thoughtfulness you have put into that decision, the work you have done to determine what comes next, and how you will achieve the success you are seeking in the next phase of your life.

What Lies Ahead

Congratulations! You have answered the questions, created the path, considered your options, done your homework, and decided to make a change. Now, what?

Now, the opportunities are limitless. You are no longer bound by the workaday rigors of a corporate existence. You can create your own adventure. What awaits is extraordinary. Consider the benefits of starting your own business:

• You are in charge of your own destiny. As an entrepreneur, you control the fate of your enterprise. You get to make the decisions, create the rules, establish the values, and reap the rewards related to your business. You are squarely in the driver’s seat and making your own decisions.
• You select the staff. When you create your own business, you can bring on the employees, advisors, investors, and consultants who share your values and vision. You can build a team of people who will work with you to achieve the vision you set forth. While that is a heady responsibility, it is also an extraordinary opportunity.
• You create the balance. A lot is said today about work/life balance. As the owner, you have the chance to set the tone and expectations that give you and your team the balance you believe is right.
• You can follow your passion. With your own business, you can realize the dreams you have had for years and help bring to life the idea that has been percolating in your head.
• You can work with the clients and customers you want. As a business owner, you can work in the markets, industries, and company you want. You can connect with the kinds of people you want to work with, on your terms, and help serve their needs with your products or services.
• You have pride of ownership. At the end of the day, you will leave a legacy behind that will be a testament to the hard work you put into the effort.

There are hundreds of restaurant concepts in America, but the three that seem to be on the top of everyone’s list to franchise are Chipotle, White Castle and Chick-fil-a. A day doesn’t go by that I don’t get a request to help secure a franchise with one of these three concepts.

Unfortunately, all three are dead ends when it comes to franchising. To start off, neither Chipotle or White Castle sell franchises. All of their stores are owned by the parent company. But, hey, there’s still Chick-fil-a, right. Probably not.

Below is a link to an article, aptly titled:

Becoming a Chick-fil-a Franchisee Is Almost Impossible

If you are interested in someday becoming a Chick-fil-a owner, please read the whole article including how Chick-fil-a defines “ownership.”

But don’t worry, there are hundreds of other great restaurant franchises to choose from. Why limit your options?

Harbour Capital, a franchise finance company has published an excellent article entitled:

The Guide To Acquiring A Franchise.

If you are considering purchasing a Franchise, I advise you to read the entire article, but here are the bullet points:

Have a Business Plan

Know Your Financial Capabilities

Acquire Adequate Financing

Select the Franchise(s) that suit you best

Thoroughly Research the Franchise(s) (including review of the FDD) that you have Chosen to Pursue

Talk to Other Franchisees

Franchising is a process, and if you’ve never been through it before, it can be more of a gauntlet.

A certified Franchise Broker can use his or her expertise and experience to move you through that process, explaining the language of franchising, connecting you to the right people and, of course, helping you to find financing sources.

However, one of the most important services a Franchise Broker can offer is in helping you to find the Franchise opportunity that fits your goals, your life style and your budget.

The first paragraph of the article states:

“Picking which franchise concept suits you best is the first major hurdle that must be overcome”

There are an estimated 4000 franchises available in the United States. A good Franchise Broker, using the information that you provide, can eliminate those Franchises that simply don’t fit you or your criteria and focus you in on those that do. My personal experience is that about 75% of those who start their search with a specific Franchise in mind, end up choosing something different.

Don’t start your path to Franchise ownership without a map. Select a knowledgeable and experienced broker and go straight to your goal.