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Can there be an independent franchise broker? Or perhaps that isn’t the problem.
My generalized opinion of franchise brokers may offend some readers.
Brokers who portray themselves as ‘consulting’ to prospective franchisees mislead and deceive. A franchise broker consultant is a contradictory description of a role that is not and cannot be unbiased.
Brokering consists of commissioned sale people driven to attract franchisors with franchise offerings to sell. I have never come across a franchise broker who refuses anyone if they have a franchise to sell or dollars to buy or the potential to have a loan application tidied up sufficiently.
Brokers tend to feign genuine ‘personal’ interest in the financial well being of the prospective franchisee ‘mark’.
When ‘vetting’ a franchise offering the broker’s interest is only in the key ‘sell’ points and disregards all negatives unless they play into the up-sell. To the franchise broker the ‘best’ offering produces a high commission in comparison to the lower commission of the ‘better’ offering’ and the even lower commission of the ‘good’ offering.
Bonus driven in-house franchise sales people are no better than the franchise broker when they accept lousy sites, hide or misrepresent performance history or simply accept anyone with funds. Such practices damage the franchising brand reputation and ensure conflict.
Brokers allow the franchisor some level of distance from the misinformation provided and sales tactics used in selling lousy franchises. The most despicable trait of a franchise broker is the portrayal of ‘consultant’.
Abysmal lawyer advice, accountants who cannot possibly interpret the investment worthiness of a franchise offering and franchise brokers either deliberately or inadvertently set up the mark. But the combination is convincing and has led many a franchisee into life destroying disaster.
The large quality brands typically don’t use brokers. Prospective franchisees must get independent advice and true consultancy doesn’t involve commissioned pretenders.
The problems aren’t with the consultant broker. The problems arise because gullible, illogical, penny pinching and lazy prospective franchisees only want to hear from those who massage their desire to sign up for what is often a poorly considered ‘golden opportunity’. They save money at set up and pay dearly later.
Prospective franchisees must gain expert advice to protect their interests and avoid hidden pitfalls. They must pay for that advice as an establishment cost of going into business.
That’s my opinion and perhaps I’m wrong. If I’ve offended anyone; take a pill.
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