Franchise Brokers: Fees and What To Expect

These industry professionals play a pivotal role in matching the right franchisees with the right franchisors. Here’s what to expect from them in terms of fees and services.

By Victoria CampisiStaff Writer

8:08AM • 05/06/24

Franchise brokers are like matchmakers in the world of franchising, helping entrepreneurs find a franchise that’s right for them. But what is it, exactly, that they do and what should you expect to pay for these services? Let's break it down.

What Do Franchise Brokers Do?

Franchise brokers are experts on the local markets they serve. As such, they stay apprised of the different franchise brands in their industries so they'll know what options are available for franchisees. They also need to develop an understanding of their clients’ needs: which industries interest them, what kind of business model (full-time or semi-absentee) are they looking for and what their ultimate goals are.

“The main component of being a successful broker is really just listening to your clients and making sure we understand what their goals are as a business owner as we transition them into being that and really trying to figure out what they're what they're looking to accomplish,” said Katie Small, president and senior franchise consultant at FranNet.

Some brokers even use personality tests to figure out what might be the best fit for their clients. Once they have a good idea of what their clients want, they can start matching them up with potential franchise opportunities.

“I work really hard to understand what's important to [my clients], what they're trying to achieve, and making sure that I'm introducing them to the right companies that are truly going to help them accomplish their goals,” said Karleen Haas, vice president and senior consultant at The You Network. “It takes time to really dig down and understand somebody and what their goals are.”

Once a match is made, the broker helps the client through all the paperwork and negotiations with the franchise company. This is especially helpful for people who haven't done this kind of thing before.

What Kind of Fees Do Franchise Brokers Charge?

Franchise brokers don't usually charge the clients for connecting them with franchisors, so how do they make their money? Typically, it's the franchisor who foots the bill. Once the deal is made and the franchisee is approved, the franchisor pays either a flat fee or a percentage (usually 30% to 50%) of the franchise fee to the broker.

The Pros and Cons of Working With Franchise Brokers

Working with a franchise broker has its benefits. They save you a ton of time and effort by narrowing down your options and helping you figure out which opportunities are right for you. Plus, they have connections in the industry that can be super helpful.

But like anything else, not all brokers are created equal. Some might have better connections or more experience than others. That's why it's a good idea to talk to a few different brokers to make sure you're getting the best advice possible.

Franchise brokers are your personal guides to the world of franchising. They do the legwork to find you the perfect match, and they get paid by the franchise companies, not you. So if you're thinking about opening a franchise, it might be worth reaching out to one of these professionals to help you along the way.

Meet a few of 1851 Franchise’s top franchise brokers in the links below: