14 Aug Can Business Brokers make money selling franchises?
Can Business Brokers make money selling franchises? If you ask me the answer is simple… Just last week one of our IFPG Members, who is a full-time business broker closed a South Beach Tanning Company and earned a $28,000 commission.
There are hundreds of franchises that pay commissions from $10,000 to $65,000. These franchises do most of the “heavy lifting” when it comes to getting a deal closed. Many franchisors actually don’t want the broker “too involved” in some cases they’d rather see you qualify, educate, and then refer your client to them. Franchise Brokers don’t have to “package” any businesses or review a balance sheet, P&L, or even tax returns.
Is it possible to flip business buyers into opening a new franchise?
Many people are scared by the “F word.” Most of your clients are looking for an existing business but when inventory is low and you can’t match your client with an existing business would you consider selling them a franchise? Of course not every dead lead will buy a franchise or even consider buying a franchise, but what if 10% of those leads would? There are many resources available to help you earn commissions from selling new franchises.
But how do you approach your clients to buy a franchise? The one thing NOT to do is ask “would you consider buying a franchise?” It seems like the obvious thing to do, but it has proven to not work. Once you have identified you don’t have an existing business for your client put down your broker hat and put on your consultant hat.
Here are some tips to help flip your dead buyer leads into buying a franchise:
- Don’t use the “F word.” Don’t even mention the word “franchise” in initial conversations.
- Ask your client “If you had a magic wand and can create any type of business to own what would it be?”
- Learn about your clients background, skill sets and work history.
- Your client doesn’t always know what the best business is for him or her. You are there to help them avoid a mistake.
- Remember buying a new franchise is like ordering a brand new car. You can pick the location, category etc. You can custom tailor an opportunity for your client.
- If your client wanted to buy that day care center that is now sold, I am sure there is a child related franchise available in that same territory that would be a good fit.
- Learn about a franchise’s Item 19 to help your clients that are buying based on cash flow.
To learn more tips and tricks we are hosting a free webinar on August 19, 2015 called:
How to earn commissions turning dead buyer leads into franchisees!
By Don Daszkowski
Don Daszkowski is the Founder of the International Franchise Professionals Group (also known as IFPG) which is a membership based organization that has over 800 members. IFPG Members consist of Franchisors, Franchise Brokers, Lenders, and other Franchise Professionals that help potential candidates in the process of buying a franchise.