Business Broker Franchise Review

This article is based on a video originally recorded on Vetted Biz Youtube channel

Patrick: Hey, you have Patrick Findaro here, co-founder at Vetted Biz and Visa Franchise. Today, I’m very excited to have on Jeff and Linda Nyman. They founded 27 years ago, First Choice Business Brokers. First Choice Business Brokers, also known as FCBB has just under 50 locations across 22 different states. They’re based in Las Vegas. And they have about 120 business brokers across the United States. So, again, founded 27 years ago. They started franchising 12 years later in 2006, which we like to see, they worked out their corporate model, got it ready to scale up. They’ve both been involved in and through their company and different franchisees, $8 billion worth of business transactions. So, very impressive track record. Again, for those that are joining, I have Jeff and Linda Nyman on. They’re the co-founders of First Choice Business Brokers, also known as FCBB. Based in Las Vegas. They have just under 50 franchises across the United States, different locations, and 22 different States. And as I mentioned, they’ve been involved in over $8 billion worth of small business transactions over these past 27 or so years.

Contents

Patrick: So, I’m very excited to have on Jeff and Linda Nyman. Again, Jeff and Linda Nyman from First Choice Business Brokers are joining right now. Hey, how’s it going?

Jeff: Good. Good.

Linda: Great. Nice to see you, Patrick.

What is a Business Broker 

Patrick: Yeah. No, thanks so much for joining today. We’d love to just talk a little bit about business brokerage and a lot of people are joining from across the United States, as well as we have a few people abroad that might not be familiar with this market. And would love to just hear from you two, if you could give a brief intro on what is this market, what’s the small business for sell marketplace, what does it mean to be a business broker? And then go through different questions about your brand and other questions that would be pertinent to someone that might want to enter in this space.

Linda: Great.

Jeff: Thank you. I think the first question most people ask is, what is a business broker and what do we do?

Linda: I don’t think a lot people know what business brokers are. I really don’t. I think that they, you know, they figure, “Oh, if I wanna sell my business or get rid of my business, I have to close it.” And they don’t even think about the option of being able to sell it. So, education on what a business broker is is great.

Jeff: Yes. Simply put, we help business owners find buyers for their business, and we help buyers find a business. It’s really that simple.
Linda: Yeah. I mean, we’ll value a business, we’ll find the right buyer, we’ll put the buyer and seller together, and we’ll navigate that process for them. So, we’re keeping that process together for them and we keep all of it fully confidential until the closing. So, that’s kind of the job of a business broker is to consult and guide buyers and sellers through the process and keeping it all confidential, which I think is probably the part that people forget the most is they need to keep it confidential.

The size of companies selling

Patrick: And like how big are these businesses? Would you be selling like a restaurant? Would you be selling a major conglomerate? What’s like a general value of the businesses that you’re selling?

Linda: Well, we often say, this will be $50,000 to $20 million. I mean, we serve a wide variety of different businesses. I would say the average for First Choice is under $10 million easily, but we’ll sell very small businesses. We’ll sell $50,000 or $100,000 business in our community. We’re known as a main street business brokerage, but we definitely have offices, especially in strategic areas that handle a lot larger transactions, almost like having a mini M&A, mergers and acquisitions division, where they handle some of those larger deals. I think in Las Vegas, we’re dealing with one that’s close to $30 million. I don’t think the price will be in there, but it’ll be close-ish. And it’s medical facilities and it’s multiple medical facilities, and we run into that quite often. So, really, restaurants, dry cleaners.

Patrick: And I imagine, for those bigger transactions, you bring on additional professionals, whether it’s real estate-related.

Linda: Absolutely. Absolutely.

Jeff: It does happen. But these are the same businesses that you drive by every day, whether it be the laundromat, the dry cleaner, the manufacturing company, even medical dental practices. But there really isn’t any type of business that we can’t handle. We are, as Linda said, a main street business broker.

So, it could be any type of business, whether it’s retail, wholesale, it doesn’t really matter.

FCBB

Patrick: So, you two co-founded FCBB 27 years ago, how did you both enter into this industry?

Jeff: Good question there. I think it was really by chance.

Linda: Yeah. It was.

Jeff: So, it seemed like, oh, this is something that no one seems to know what a business broker is. And so, we investigated it. And upon investigation, we said, “This really looks interesting.”

Linda: It’s a very niche business.

Jeff: It is.

Linda: It really is. And we were consulting with business owners, but not to this extent, and people were, “Great, you can consult with me, but I need a business.” And so, we ended up in the industry and we never looked back. You know, I think the biggest mistake we’ve made is not getting into it sooner. We love the business, and most business brokers that enjoy just entrepreneurialship and dealing with individuals that love business, they find themselves in a career that they never see themselves getting out of. And there are business brokers that literally are in their 90s still doing business, experience counts in this business.

Benefits of being a business broker in the U.S.

Patrick: So, beyond like talking to so many different entrepreneurs and getting into the weeds in all different types of businesses, what has continued to attract you to being a business broker and running this sizable franchise organization?

Jeff: I would say the variety of businesses we deal with. We go into a business and we go, for example, into a restaurant, we go into the kitchen and take a look. These are the areas that a customer would never see. It’s just the variety and the different types of businesses. As an example, one time I was working with a company, believe it or not, was $130 million. I walked out of that meeting and went and helped one of my agents with a $50,000 pizza restaurant all within the same hour. There’s that variety. And I don’t think Linda and I look at it as a job, because we actually enjoy what we do, and you’ll find the most successful business brokers, they really enjoy what they do.

Linda: Yes. It’s just interesting. I mean, when you think about it, any business you go in, as soon as you become a business broker and you start to look at the business from a whole different aspect. When you walk into a restaurant you think, “I wonder what they have in the kitchen. What equipment do they have here?” You know, and you start to think about, you know, “Where could they increase their bottom line?” And it’s just a different feeling. You get to see everything that runs that business instead of just the customer side.

Jeff: It’s good and bad 

Linda: Yeah. Good and bad. That’s true.

Patrick: Well, yeah, I would say, for us, you know, it’s kind of similar from the franchise side, Vetted Biz and Visa Franchise, where we just see so many different business models and it’s never-ending, and it’s like a continued education.

Jeff: It is.

Linda: Yeah. It is.

Patrick: And you guys are exploring that many more different industries because franchising is pretty…there’s a lot less industries. Like, you can’t be doing a heavy industrial business for franchising, but for you guys, you could sell that business.

Jeff: Yeah. So, in fact, we do a lot of franchise resales also, whether it be similar to dairy queens, you know…

Linda: Yeah. Hair salons, you know, like the Fantastic Sams and Sports Clips and all those. Yeah.

Jeff: Yeah. We do a lot of those resales.

Linda: Yeah. You’re right, it’s a continual education. And I think that that’s what I find most enjoyable. And you’re dealing with so many different personalities. Business owners are a unique group, you know?

Patrick: For better or worse, they want an entrepreneurship. I would say the U.S., you’re not forced to go in entrepreneurship like some emerging markets, where really to just live, you got to be an entrepreneur, where the U.S., there generally is a relatively safe alternative and you can get a steady salary doing something else. So, definitely it takes a special individual.

Linda: It does. It does. And somebody that’s willing to take a risk. You know, and being in Las Vegas, we always say, the biggest gamblers are business owners. They’re the people that have really gone out there and made business, and they’ve adapted to the change in the economic climate, etc.

Jeff: And if it doesn’t work out, then the business goes up for sale and the other buyer is willing to take it over and just keep on growing that business.

Linda: Yeah. A repeat business in business brokerage is huge.

Jeff: Tremendous. A buyer who…

Patrick: Exactly. I’m part of a few entrepreneurial groups here in South Florida and there are serial entrepreneurs that are just going out, buying smaller mom-and-pops with business brokers, rolling into their system, selling that. So, I imagine you’ve had a lot of repeat clients over the years.

Jeff: Huge. It’s huge.

Linda: Yeah. And, you know, I look at it and I always say that it’s their mini-empire. So, if I have, you know, maybe some younger buyers coming in that are either partners, you know, people partner with siblings or they’ll partner with somebody that, you know, friend from college or whatever, and they start to build their little empire of different businesses. And they may be strategic purchases where they’re buying businesses that can work with one another, or maybe they’ll absorb one business into another, or they’ll buy all different types of pizza restaurants and roll them into one name eventually. You know, so many different things. It’s really interesting to see people’s ideas and what they do with it.

The competitive landscape in Business Broker

Patrick: Yeah. And I’m sure there’s so many shared learnings that you can pass your other clients. So, for those that are not familiar, can you tell us a little bit about the competitive landscape? And I understand there’s other franchise in the space, there’s independent business brokers that are a big percentage of the market, would just love to hear a bit about how the competitive landscape is and then how FCBB differentiates itself.

Linda: You know, you would think that there are a lot of competitors, you know, and especially when we start to talk about the fees that are made by business brokers. But it’s kind of a secret industry still. So, even though it’s been around for ages, it is, as you say, Patrick, you know, it’s those one-offs, you know, mom-and-pops out there. But a lot of them don’t do a lot of listings. They maybe will do three or four listings in a year. They’ll do those, they’ll sell them, they’ll make a nice living, and they aren’t really where a buyer can go to see a variety of different businesses. And so, that kind of sets those apart from us for sure because they don’t have the inventory. They kind of have their base of business and that’s about it. And they can make a nice living that way.

Jeff: Well, according to, I believe, the SBA, there’s 30 million small businesses in the U.S., and there are only 4,000 business brokers. So, I don’t really call it a competitive industry because we don’t come across the competitors usually when we’re dealing with a business owner. How do we compare with those? I would say it’s basically our training. We have hired in business brokers from other franchises and we require them to go through our training, and sometimes they’ll go through and say, “Wow, I didn’t know this even existed the way you guys do it.”

Linda: Yeah. It’s funny because we call it First Choice University. So, they have 44 courses they go through, and then they go through a week of live case studies and valuations. And at the end, you know, some of the quotes that we get for testimonials are, “I didn’t know what I didn’t know.”

Jeff: It’s very, it’s not that common to actually talk to a business owner where he’s talking to two, three, four other business brokers. It just doesn’t seem to be…once in a while, but really that’s not the case.

Linda: But I think for us, what sets us apart is the training, and then we have the systems and the support. So, you know, the training really gets people. The foundation gets them started. And all of it goes through First Choice University corporate. So, that’s supported for all of our franchisees. So, even if a franchisee is new, we’re having them bring on agents right away so they build that synergy and build up that listing business or inventory in their office. And then we have the systems and the support to keep them moving forward so that they’re not feeling lost. And, you know, you work with franchises, they can only absorb so much during training.

Patrick: Sure. That’s practical.

Linda: Yeah.

Jeff: I think the main reason for our support is because we are a boots-on-the-ground company. Linda and I are still involved in business brokerage. You really can’t help. It just happens with your clientele. So, when a franchisee is saying, “I have a question, I have a situation that I need to be covered.” We can answer it. We’re not just saying, “Oh, well, let me just defer you to somebody,” because we are boots-on-the-ground company.

What types of backgrounds does someone need to own a First Choice franchise?

Linda: You know, we have such a variety of backgrounds.

Jeff: Not sales. Not necessarily sales.

Linda: And it’s not. And I think most people think it is sales, and it isn’t necessarily. I mean, great, if somebody has great sales skills, that’s great, but it’s really more about their follow-up, their ability to navigate, consult with people to maybe professionally push them along through a process. And that’s, again, you know, business brokerage is not an event, right? It’s a process. When you sell a business, it’s a process. I think that it’s incredible for most people getting into business brokerage because all of their background, no matter what they’ve done in their life, they can apply it to business brokerage.

Jeff: Just to give you an example, some of the franchisees that we have CPAs, attorneys, geologists, I mean…

Linda: We have an airline pilot, we had a DEA.

Jeff: I mean, just about any type of background you can imagine, who’s I would say a people person, and that’s…