It’s amazing the stuff brokers get away with when it comes to selling routes. Throughout the years of me purchasing my own routes and looking for other routes to buy through brokers, the amount of service that you get from these people has a tremendous variance.
Bad brokers come in a myriad of flavors, the most common are:
THE POINTLESS FORMALITIES BROKER:
These guys are hell bent on getting proof of funds, NDAs, buyer profiles, and pointless questionnaires all at the very start. Many business buyers just want couple of generic questions answered initially about the route to determine if it’s even worth pursuing.
If a buyer asks a generic, non-identifiable business question, then brokers need to answer the damn question.
Instead, some brokers insist on having the buyers fill out questionnaires, NDAs, and wasting the broker and the buyers time and then the buyer ends up discovering the business isn’t even for them after a couple basic questions are answered. In the mean time, every buyer that was on the fence and didn’t hear enough about the business to get excited, got pushed away when they saw that they needed to waste 30 minutes of paperwork to accomplish absolutely nothing.
Asking for proof of funds immediately is like Walmart greeters asking to see your bank account statement before you walk in!
No reasonable business does this, and neither should your broker if they’re interested in selling. The time brokers waste harassing everyone for their proof of funds is about the same amount of time they’ll waste talking for 30 minutes to some guy that didn’t have any money and just wanted to tire kick businesses a little bit. Even I started out as a tire kicker though! And guess which broker I came back to years later when I had the money. Point is, either brokers are wasting 30 minutes talking to an unqualified buyer (that may later become qualified) or wasting 30 minutes bugging buyers for proof of funds, burning bridges, and losing buyers. One broker here is smart, the other one…not so much.
THE LAZY BROKER:
Then I’ve had the brokers that are friendly, but getting them to work is nearly impossible. Asking a question has a 2 or 3 day lead time before I ever get a response. These are brokers that watch the clock until 5:00pm for quittin’ time like Fred Flintstone. Call at 5:01pm and you’re getting nothing but the voicemail filling your ear with promises of how fast they’ll get “right back with you.”
Average bad brokers need to get the memo that says that many buyers that have the money for the route, probably have a job to make that money, and are working until 5pm and can’t reasonably call and talk at length before that.
JACK OF ALL TRADES, MASTER OF NONE BROKER:
Some brokers are on the bigger scale, they work for larger nationwide brokerage houses and sell any business that will give them a shiny nickel of commission at the end of the day, regardless of their expertise or knowledge of the business they’re selling. I’ve learned it’s impossible to know what every buyer will ask and sometimes the broker has got to ask the owner on rare occasion. But when you’re asking common route questions like, “Is there a manager working or is that owner working? How many hours is the owner working?” and the broker says, “Great question! Lemme check with the seller.” you’ve found yourself the broker I’m talking about.
Dealing with these guys is like going into a convenience store when you’re looking for a Rolex. I’d go elsewhere.
THE ROGUE BROKER:
The worst part about many brokers are that these people have no management or a real boss. There’s no one listening to a sales call for a manager to come by and say, “Did I just overhear you say on the phone to a client that was a ‘stupid question’?! YOU’RE FIRED!” So these guys run around, unchecked and unmonitored. Unfortunately even the potential buyer is likely thinking, “The owner needs to know this broker is actually PREVENTING the sale.”
But the interested buyer doesn’t know who the owner is usually yet to tell them to fire their broker.
THE INEFFICIENT BROKER:
These guys are the ones that get asked the same question about the business day in and day out and never compile a FAQ. Selling a route without a FAQ is just wasting everyone’s time. People are always going to ask how many hours the owner works, what the owner does, whether there’s employees, how much the employees are paid, and how much the route could net with the owner running it and how much it could get without the owner running it.
These are questions that no real buyer has ever made it to the closing table without asking!
Yet when you ask the broker these questions they usually either “have to get back with you”, or you’ve to wait several days for them to respond to the email with your questions. This is like going into a sales room and there being no brochures. You still need the salesman, but the brochure is going to answer some amount of questions that 100% of people will have.
Many buyers email me to tell me that the route broker they’re contacting will not return their calls or emails, or is argumentative when asking for basic due diligence materials. The reality is this: it’s not you. There are just some brokers out there that are simply not good and if you’re a buyer, just know that you’re not doing anything wrong. The only person doing something wrong is the sellers using these individuals to begin with.
If you’re an owner and on the fence on whether you should fire your broker and want to be sure, I’d just have a friend call them up for a couple minutes and see how quick they are to be friendly, engage them, generate interest and see how they want to move through the process when questions are asked. You might be lucky and have someone decent – no broker is perfect, but brokers as a whole have set the bar so low that if you get a broker that doesn’t PREVENT you from selling your route, they’re probably above average. Personally though, I’m not sure I’d be content with this standard.
Sellers must the right broker, as it’s critical to getting a the route sold. Good route brokers seem to come and go throughout the years, and the best route broker to use today might not be the same one to use next year. While many bad route brokers have made this industry look bad, working with a good route broker can be extremely valuable for both buyers AND sellers.