Without a doubt, franchise brokers have had a tremendous effect on sales in the industry. But does that mean your franchise brand should enlist their assistance? It really depends on a few things. Are you meeting your sales goals? Has interest waned in your franchise concept? Could your sales use a boost and, more importantly, are you willing to cede some upfront profits to achieve them? During this week’s blog edition, we’re going to look at a few of the positive aspects of bringing franchise brokers into the sales game on your behalf.
How do they work?
Franchise brokers, in a way, work like sales consultants. They make their money on sales of your franchise brand either through a flat fee or, more commonly, a commission structure. Sometimes that includes inviting bonus program offers as well. This motivates them to scour the pool of franchisee candidates who might match up well with your business model. It’s up to the franchise broker to generate the lead, educate their client, and align them with your franchise.
What to look for in a franchise broker
As a franchise brand interested in bringing on a franchise broker (or brokers), do your research on their operation. If you care about protecting your brand and its reputation, you’ll work hard to find reputable, hard-working and ethical partners to help you drive new sales. Ask to see their track record of sales placements. It would also be beneficial to ask how have they worked to drive sales in your particular brand category. You’ll need to know, as many franchise brokers specialize in certain business channels only. You’ll also want to understand what sets them apart in the industry – no two broker networks are the same.
What your brand needs to do first
Once you’ve made the decision to seek a franchise broker partner, you’ll have some homework of your own to complete. Make sure that all of your franchise information is as up to date as possible. Review your FDD and ensure the information contained in it is the most up-to-date. You don’t want brokers sharing information that’s outdated. It may even make sense to invest in some fresher collateral such as sales sheets, location assistance options and your latest financial terms. If you’re able, weigh your options among franchise brokers to find the most suitable compensation structure for your particular organization in the long term. Set up a series of future assessment checkpoints in order to determine whether or not your relationship is working. If it isn’t, tweak the formula.
Good Relationships Produce
As with any broker or sales consultant relationship, your franchise brand will benefit greatly by putting in the extra effort to create a true partnership. Franchise brokers should be seen as a direct extension of your brand’s sales department, so treat them as such. Does their contribution to your organization stop with the delivery of a pre-screened and qualified lead? It shouldn’t. Franchise brokers who work hand-in-hand with your organization should remain engaged—even all the way up to and including Discovery Days. Remember, your new franchisee already enjoys a special bond with them.
In closing, here are some positive statistics regarding the use of franchise brokers and sales consultants:
- Over 50 percent of all initial leads for franchise deals originate over the Internet, and a large portion of these candidates are delivered by brokers
- It’s estimated that over 3,000 franchise deals are closed annually with the express participation of franchise brokers
- According to Franchise Update Media Group, a survey of 126 different franchises revealed that over 50 percent used brokers or sales consultants. And 67 percent of those using brokers reported closed deals
Franchise brokers can bring an added boost to your brand’s sales efforts. But as with anything else in this industry, we always preach a cautious and measured approach to investigating what they can do for your particular organization.
As a franchisor, you can take solace in knowing that there is a tool out there to help you determine which existing and potential franchisees best fit your business concept. Proven Match is the proven solution in determining those factors. Through our proven behavioral assessment techniques, predictive analysis becomes predictive success for your franchise concept. If you’re ready to show your leadership by getting started, give us a call and we’ll put you on the path to a more productive year in 2016.