Working With A Franchise Broker: Pros and Cons

Franchise brokers identify well-qualified franchisee candidates and match them with franchisors that might be a good fit. They also offer guidance, consulting, and a network of resources to help prospective franchisees through the process. However, before you work with a broker, consider the pros and cons of this option.


Franchise brokers help potential franchisees evaluate opportunities and find the right one based on their professional and personal goals. They also provide insight into the responsibilities and risks of owning a business, including the upfront costs and long-term expenses. They often research individual franchisors to determine if they best fit a candidate’s qualifications and experience. It can save prospective franchisees time by eliminating companies that must meet their criteria. However, it is important for a franchisee to thoroughly check out the broker’s background and reputation before hiring them. Candidates should only engage with a franchise broker with verified experience because anyone can put up a shingle and call themselves a franchise broker. In addition, they should understand how franchise brokers are paid and whether or not they are incentivized to steer them toward a specific franchise option. It can influence their decision-making process and may close their eyes to key questions they should be asking.


Franchise brokers strongly desire to help you buy a franchise that aligns with your skills, interests and career goals. Their work requires finely honed analytical skills and the ability to listen closely to their client’s needs. They also need to be able to find the right professionals to assist with the research process-a lawyer, an accountant, for example. The time savings offered by a broker can be substantial. The amount of data available for a franchise can be overwhelming, and brokers save prospective owners valuable time by weeding out the options that are unlikely to be a good fit. However, it is important to remember that the broker’s advice should be taken with a grain of salt. The franchisor pays them a commission when they close a deal, and this incentive can unduly influence some. It may lead them to recommend franchises that meet the buyer’s qualifications.


There are many benefits to joining a franchise broker network. Some broker networks provide events, educational opportunities and other resources to help franchise professionals grow their business and build relationships with other brokers. Franchisors can gain exposure to potential franchisee candidates through these networks. However, being vigilant about the brokers in your network is important. Check and double-check their credentials, track record and information. You can also ask for references from other brokers. Since franchise brokers are paid a fee when they find a buyer for a franchise, they have a financial incentive to sell as many franchises as possible. It may lead them to recommend only the most lucrative options and not consider your best interests. It is important to work with a broker that has a good reputation and leads with integrity to avoid this. Also, thank and recognize brokers when they send you qualified franchisee leads. It will keep them coming back!


Franchise brokers typically receive a commission – based on the initial franchise fee outlined in the brand’s Franchise Disclosure Document – when they procure a franchise sale for a candidate. It’s important for candidates to be aware of this arrangement and to work with brokers whose compensation structure aligns with their own business goals. The absence of barriers to becoming a broker also means bad apples are out there. It’s important for candidates to investigate a broker’s experience and reputation and to seek the advice of a qualified accountant and attorney before working with any broker.

Another important consideration is the cost of working with a broker. It’s common for brokers to perform crucial research into specific franchise opportunities, which can be an expensive part of the process. However, a broker’s services can be invaluable in the long run for many candidates. For example, a broker can save candidates money by steering them away from a franchise concept that would have been a terrible match for their goals.