Should I Use a Broker to Sell My Franchise?

As a business owner in search of franchisees, you already appreciate the importance of candidate selection. You also know the many steps involved, from finding the right prospects to vetting them. Because the process is so detailed, it is highly recommended for business owners to work with franchise brokers, also known as franchise consultants, to help find ideal franchisees.

Throughout our long history in the franchise development industry, Pinnacle Franchise Development has built strong relationships with a network of trusted brokers. We use these relationships to benefit franchise owners in search of buyers.

What Are Franchise Brokers?

Franchise brokers serve a critical role in the relationship between franchisor and franchisee. When it comes to finding qualified buyers, a broker will search for prospects and perform all the due diligence necessary to ensure a good fit with the seller’s enterprise. If they find a match, the broker will reach out and share the opportunity.

Regardless of whether you are looking to sell your franchise or purchase one, it’s the franchise brokers who can deliver sound opportunities for parties on either side of the transaction. In the franchising services industry, broker assistance significantly widens the playing field.

Franchise Broker Benefits

Some businesses forgo brokerage assistance to save money. However, consider the financial risk you take without the broker’s connections. How well do you know who’s in the market? And remember, it takes a lot of time and effort to navigate the sales process on your own. Those are hours that could be spent on your other business objectives.
With this in mind, think about the following benefits you receive when you retain the services of a broker:

• Greater Chance of Success – The quality of your franchisees is a non-negotiable point. Fortunately, brokers typically have a wide network of candidates to choose from, which increases the likelihood of finding the right candidate. It is challenging to identify a suitable buyer on your own, but a brokerage firm will already have a reliable process in place. Based on the 2020 Franchise Sales Index: Lead-To-Deal Ratio statistics – the second largest source of leads that turned into deals was from brokers (after referrals). Leads from brokers have a high conversion rate at 4.25%, which is why working with franchise brokers is so lucrative. Learn more about this data by listening to the franconnect webinar.

• Help with Due Diligence – Once you find a prospective franchisee, the next step is to vet them. Due diligence is vital to the success of the sale, and a broker already has the skill and tools on hand to thoroughly evaluate and verify financial records, credentials, and other revealing information.
• Time – In addition to the complexities of the due diligence process, it can also take a lot of time. With a broker’s assistance, you can rest assured of a reliable process without taking time away from other vital business processes.

For nearly a decade, Pinnacle Franchise Development has been a leading force in the industry. We have established relationships with a variety of broker groups and know the best practices to effectively working with them.

Our team has connections to a variety of brokers whose services we recommend and who will be happy to introduce you to qualified franchise investors in their network. Let Pinnacle continue to support you through every step of the sales process, while you focus on other essential business matters. Please contact us to learn more about our services or to schedule a consultation.

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