Doron Straus | Corporate Trainer – Business Alliance, Inc.
Just like in any job, franchise brokers face continuous business challenges. How they respond and react to those challenges will, in large part, determine the degree of their success. Here is a listing of several challenges that face today’s franchise brokers and how they will need to adapt accordingly.
The franchise industry is highly competitive with many brokers vying for a limited, qualified client pool. How a broker will stand out will play a larger role in the broker’s success, especially since franchisors have in-house sales teams. Will the broker develop an organic strategy to build and brand their practice? Will the broker develop a strong social media presence and continually populate their social media with relevant and value-added commentary? Commentary could be in the form of blog posts or even interviews with franchisees, franchisors, and resource partners to the franchise industry. Will the broker go the extra mile and offer seminars within their community or even as an outreach? What will the broker do to set themselves apart from all the other brokers? How will your franchise brokerage be unique?
Changing Market Trends:
Brokers need to be aware of the latest market trends and client preferences, whether that be on how a prospect prefers to be contacted initially (Email, Text, then Voice-Franchise Insights Apr-Jun2023). Brokers need to be on top of emerging industries to understand the direction of brand trends. The broker needs to be able to identify profitable brands and brand categories.
Franchise Knowledge and Expertise:
Staying educated about the differing franchise models, industries, and brands that they represent, understanding the financials required will surely set the broker apart from the competition. Keeping up on educational seminars, roundtable discussions with your peers, webinars and continual training will keep the broker ahead of the pack.
Building and Maintaining Relationships:
Establishing strong relationships with the lead providers, with the franchise sales team and with your qualified candidates is crucial. Attending networking events that are offered through franchises bodies, such as the IFA or attending events sponsored through your brokerage house (The Business Alliance) will foster connections that will build trust and credibility.
Financing and Investment Challenges:
As a broker, be prepared to introduce your qualified candidates to financing options early in the investigative process. Introduce your candidate to those funding resources that we have a relationship with. Doing so not only will help your candidate understand their financial position in relation to the concepts they are considering, but also will function as a pre-qualification step for the sales team of the franchise which will make the process go more smoothly. As a broker, make sure that you understand the different funding options available to your candidate, from self-funding, SBA loans, traditional bank loans, home equity, retirement savings and other options. Your job is not to be a financial counselor, rather, just to be knowledgeable of the options that are available to mention to your candidate.
The brokerage industry has come a long way in a noticeably brief period. Embracing technology and utilizing digital tools for marketing, lead generation and customer relationship management is critical. Resources that optimize automation for contact points (touches), resources that identify leads exactly where they are in their decision-making process, resources that manage and control your social media presence are all aspects of technology that today’s broker will need to maintain a competitive advantage.
Brokers need to be able to navigate situations when economic uncertainty or recession can cause hesitancy with potential franchisees with respect to making a substantial financial investment. The broker needs to be adaptable and can identify those brands or categories that are adaptable to changing market conditions.
Franchise brokers can succeed by staying informed, building strong relationships, embracing technology, and continuously honing their skills and industry knowledge. Adapting to the evolving needs of the potential franchisees and the franchisors is key to thriving in today’s environment.