Being a Franchise Broker will grow significantly in popularity
Two factors to consider here. 1) The changing landscape of the 9-5. Companies and workers have had the opportunity in the past year to ‘experiment’ or completely implement remote working. Most industries saw an increase in productivity and a lowering of costs (office space, supplies, printers, etc). That is why corporations like Twitter are offering their employees the option to continue to stay remote. I believe as people continue to work from home or may become disappointed with having to go back to in-person work, there will be a growth in issues with their corporate relationships (bosses and co-workers). As people get comfortable with the untraditional work style, they will look at occupations that give them flexibility and ownership. Being a franchise broker gives them this independence. 2) Franchise brokering has historically been a popular occupation for retirees. Every day in the United States, 10,000 people turn 65, and the number of older adults will more than double over the next several decades and represent over 20 percent of the population by 2050*. With no quota minimums or required hours there will be a large uptick in people wanting to throw their hat in the brokering ring. Lastly, people are continuing to work longer in life. This has been a trend since the 80s. Recent retirees will need a part time occupation if they will want to retire at their desired age.
Automation & Brokers
My second prediction is that continued automation in the franchise ownership process will make brokering highly competitive. We live in an age now where people do not want to deal with a salesman who is just trying to make their commission. However, there is large trust in online information when researching a product. People trust a stat on a company’s website much more than hearing it from a salesman who may just be telling them what they want to hear. Future franchisees like to go at their own pace on an online platform rather than having a salesman push them along. You can look at Carvana and Tesla as examples. In 2018 Tesla sold 78% of their Model 3 online**. Then in 2019, “Tesla CEO Elon Musk said Thursday the company will be reducing headcount in sales and closing most of its stores. Instead, Tesla will sell its cars online only, and give drivers up to a week to return newly purchased electric vehicles if they aren’t satisfied”***. Candidates want to their own educating online and research when they desire. Automation also makes the candidate feel they are saving money since they are doing the work themselves.
Silver Lining, How Brokers will become valued
You do the nitty gritty work: As a broker you need to promote yourself as a mentor that will save the candidate time and money. Emphasize that you will help as much as you can with the paperwork, scheduling, FDD examination/explanation, and coaching for meeting with the Franchisor. The last one is a great opportunity. Automation may take a lot of the sales steps away from you, but the franchisor still needs to approve of the candidate. There is a large group of people that meet all the financial requirements, fill out all the paperwork, have references and experience, BUT do not fit well with the franchisor, whether that is due to personality type, goals, etc. This is where you can be a coach and advise them on the importance of answering the questions correctly and knowing what the franchisor is looking for.
Be involved with complicated prospects
As a broker, you will need to find the prospects that have extra hurdles to jump. If you can make the process easier and save the prospect time (where automation cannot), you will provide value. An example of a more complicated candidate would be someone who may need outside investors, loans, multiple partners, or is looking for an E2-Visa exemption.
Bonus Advise!
Give out your advice for free
You can easily make a YouTube account or newsletter where you provide the community/industry with expert knowledge at no cost. Yes, sometimes this advice may seem like your intellectual property being broadcasted for free, but candidates will be attracting to someone who is honest, helpful and knowledgeable. Do case studies and examine why certain concepts are successful (successful right now! Not in the last 30 years) and show the day-in-the-life of being a franchisee.
Peter Hall
Fransmart Channel Partner Coordinator