BusinessReport.com

POSITION: Co-founder

COMPANY: Gulf South Franchise Authority

WHAT HE DOES: Matches franchisors with franchisees

REVENUE: About $100,000 anticipated this year

NEXT GOAL: Creating franchise opportunities for businesses that have never franchised before

Scott McKay started Purple & Gold, an LSU sports magazine, in 1997 to challenge the more-established Tiger Rag. The Internet—particularly Rivals.com—helped shoot down his enterprise about seven years later.

But McKay says it might have turned out differently if, instead of being out there alone, there had been some sort of franchise network for college sports publications he could have joined to deal with printers and get help with shipping and branding.

McKay is now half of a two-man franchise called Gulf South Franchise Authority, whose mission is to help set up—wait for it—franchises. He plays matchmaker between businesses looking for franchisees and budding entrepreneurs looking for an opportunity.

He only gets paid when one of his matches leads to a sale and he collects a fee from the franchisor. While there are other business brokerage firms in the Capital Region, few, if any, specialize in franchise brokering.

“Nobody in this market does anything remotely close to what we do,” McKay says.

According to franchise consultant Mark Siebert, franchise brokers were used sparingly less than a decade ago. They now have a hand in perhaps 10% of franchise sales, he says, but remain controversial. If you’re a franchisor, you’re already paying a sales person or staff, so why cough up an extra fee to a broker? If you’re a potential franchisee, why trust a broker who only works with a fraction of the more than 3,000 possible franchises?

McKay thoroughly interviews each potential franchisee to gauge their interest and what sort of business they’re able to handle. So the franchisor’s salespeople know they’re getting a serious, qualified buyer, which makes their job easier and reduces or eliminates the need to market, he argues.

On the other side, McKay can help a franchisee cut through the hype from thousands of possible franchises to find the right opportunity. His company has relationships with about 250 franchisors, but he says all of them are very solid opportunities. If none are suitable for his client, he goes out and finds one that is. He admits some franchisors pay better fees than others, but claims the difference to his bottom line is insignificant.

“I just want to get somebody into something that works for them,” McKay says. “There’s no perfect franchise out there, and there’s no perfect franchisee. But there can be perfect franchises for given franchisees.”