If you’re interested in investing in franchising, or even owning one at some point or other, you’re going to have to know the differences between a franchise broker and franchise consultant. More often than not, people confuse a franchise broker with a franchise consultant, or end up believing that they’re the same thing, which isn’t true!
What’s the Difference?
If you’re new to the franchise world, we know terms can get a little confusing. Let’s clarify.
For a prospective franchisee, choosing a franchise to invest in is one of the biggest decisions that they can make, which can be really overwhelming if handled alone. That’s where franchise consultants enter the picture. With a multitude of franchise opportunities up for grabs, franchise consultants help match an individual with a franchise that aligns with their particular interests, experience, and budget.
Ultimately, for a cost, a franchise consultant guides potential franchisees through the process.
Franchise brokers are hired by franchisors to introduce franchises to potential franchisees. So, unlike a franchise consultant, a franchise broker offers their valued services for free. Once you’ve enlisted the services of a franchise broker, they’ll begin the process of scouting for — and screening through — an arsenal of franchise opportunities. They’ll help prospective franchisees make the right choice, all with a minimized risk factor.
Should You Work with a Franchise Broker?
Although many individuals might be skeptical of working with a franchise broker, primarily because the mere notion of a franchise broker seems too good to be true. Having said that, the only way to eliminate doubt while recruiting a franchise broker is to look at the pros and cons systematically.
The Biggest Pro: Saved Time
The biggest pro of relying on a franchise broker is the whopping amount of time that you end up saving. Given the staggering number of franchise options available, scouting for the perfect match is a time-consuming process that a franchise broker significantly helps speed up. A prospective franchisee can save a lot of money if a franchise broker ends up steering them away from an unreliable or risky franchise match. Furthermore, success rates increase with the engagement of a franchise broker, especially when compared with instances when their services aren’t used.
The Biggest Con: Uneducated Franchise Consultants
The biggest con of using a Franchise Consultant or Broker is using one who is not trained on the Franchise Disclosure Document or FDD. There are many franchise brokers who are in the business, sometimes for a very long time, who do not understand the very disclosure which shows them the track record of the franchise they are promoting.
If franchise brokers don’t know that disclosure and the risks that are discussed in it, then they essentially don’t understand what they are promoting. This is the norm, not the exception in the franchise broker industry. The leadership in the industry actively discourages the franchise consultants from knowing and reading the franchise disclosure documents. Before you commit to a particular franchise broker, you should verify their credentials, scrutinize their track record, and double-check their information.
Need Franchise Guidance?
Buying a franchise is a major decision. Relying on the expert advice of a franchise broker can help you make the best investment. At Franchise Brokers Association, we help put people just like you into a business you’ll love. For more information about buying a franchise, contact our team. If you’d like to get started as a franchise broker, check out our franchise broker training program!