The value of being a client of The Franchise Maker does not stop once your franchise development is finished and you are out in the marketplace offering franchise opportunities. Nope, we are so passionate about the franchise industry that we continue to look out for you even after our work is done. The unfortunate truth is that the games and gimmicks don’t stop after you are done with your franchise development process (for more games and gimmicks when looking to franchise your business take a peek at “Latest Gimmicks to Franchise Your Business“). We recently learned of a new trend geared toward businesses that have already franchised (mostly new franchisors) and we want to tell you about it.
Sneaky Trends in The Franchise Industry
So let’s fast forward in time and let’s assume your franchise development process is now done (see how to franchise in eight easy steps). Your future self is now offering franchise opportunities. There is no doubt that once you start to advertise and market your new franchise opportunity you are going to attract interest… but NOT just from people wanting to buy your franchise. Almost immediately you will also receive interest from a wide variety of franchise brokerage companies (read about how some franchise brokers don’t even call themselves brokers anymore and now coin themselves as franchise consultants, advisors, counselors or even franchise development companies). Some of these franchise sales companies can be equated to “franchise ambulance chasers” (these companies have been known to scour our website on a regular basis to find new and upcoming franchise systems). These guys will say all the right things and they will wine and dine you, all in an effort to be married to your hip. They are smooth talkers and they’re good.
These franchise sales companies (previously known as franchise brokerage companies) come in all forms and seem to be popping up everywhere. They will tout their successes to try and tempt you (especially if you are a new and hungry franchisor) with the notion that they can make you too a big success. They are name droppers and if you choose to work with them, they will do a good job of derailing your path (read how this is one of the most common mistakes made by new franchisors). These types of franchise sales companies are the new evolution of franchise brokers. They hunt down franchisors, particularly targeting new ones, and play on your emotions.
Franchise Sales Companies
These franchise sales companies who are now calling themselves franchise development companies typically have their own agenda, wanting you to rewrite your franchise documents to include an area development or regional development program, a dangerous path for an unseasoned franchisor. They promise that by doing all this then they can really do the same for you that they have done for others. Then their hidden agenda really starts to unfold. They tell you that they either want equity in your franchise company, a limited partnership arrangement and/or an ongoing percentage of the royalties you collect from each franchisee (take a look at “I Just Want Someone to Make a Franchise for Me No Scams“). All in addition to the typical commission they take from your franchise fee. This is like making a deal with the devil!
“But they bring a lot to the table!” you say to yourself. Despite the notion of giving up part of your company and/or additional profits, you are swayed by this franchise sales company. You are now convinced this may be the quickest path to get your franchise on the map. You might be convinced to have your franchise structure reformatted by one of their attorneys as they say this is “required”.
We are here to tell your future self to STAY AWAY from these types arrangements. Unfortunately we have seen way too often how such arrangements with these franchise sales companies end poorly and we have seen the fallout of what happens when franchising companies (like your future self) “make a deal with the devil”. We have seen the poor choice of attorneys these companies use and how these attorneys have either been disbarred or have been sued by many of their clients for putting their franchise system in jeopardy. In reality getting into bed with these types of franchise sales companies is super easy to do but very difficult and expensive to unravel. In some cases even halting or completely destroying what could have been a promising franchise.
Beware of Franchise Brokers
So be careful. If down the road after you have franchised your business, you get a blind call from a franchise sales company or someone representing themselves as a franchise salesperson (formerly called franchise broker) who is touting their expertise in helping you expand your franchise system by all means entertain it, but keep them on a short leash. Let them prove themselves to you before you immediately jump into bed with them and they become your best buddies. As they prove themselves they can earn more of a role in your future franchise company. Believe it or not, some of these franchise sales companies purposely infiltrate franchise systems (like your future franchise system) to cause you destruction for their own gain that will eventually render you helpless.
We’ve had clients who have received these types of calls and say they have gotten so dizzy from people talking in their ear that they got confused. So a bit of advice for your future self, when you are contacted by these franchise sales companies we encourage you to be careful, do your research, peel the onion back and find out if they were really as integral of a part in these other franchise systems’ success as they say. Because if they were truly responsible for those successes, you might ask yourself why would they be chasing you down rather than the other way around.
At The Franchise Maker our involvement does not stop after your franchise development process is completed (check out more reasons you will want to choose us to franchise your business). We stay on the lookout for things that could harm your franchising efforts, derail your path and we take on the role of being a watch dog and keeping you informed (just in case you run into any nonsense). You don’t have to worry about any types of games or gimmicks when you work with The Franchise Maker as we are a flat fee for service business and we are NOT a franchise sales company or a franchise brokerage company. The Franchise Maker is an award-winning company (learn more about us) and we align ourselves only with other reputable businesses, attorneys and other professionals whose main purpose is to help you succeed. To talk with someone about franchising your business call us directly at 1-877-615-5177 or contact us through our main website.
