How To Sell Franchises in 2026 Guide — Marketplace vs. Direct: Where to Spend First

In the world of franchise development, successfully attracting and onboarding new owners requires a strategic and multi-faceted approach. A marketplace approach to franchise sales, for example, involves listing the opportunity on third-party platforms, like online directories or broker networks that aggregate various brands and primarily focus on lead volume. Direct sales rely on the franchisor's own channels — such as organic social media, founder-led outreach and local marketing — to tell the brand's unique positioning.

According to Brigham Dallas, CEO at HelloSugar, the decision about where to spend early franchise-development dollars begins with a simple truth that most emerging brands forget: “People shouldn’t be as concerned with having a ton of franchisees in the beginning,” he said. “The thing that sells franchises more than anything else is a good story.”

And for many brands, that story doesn’t begin in a marketplace. It begins with one great operator.

In the Early Years, the Best “Lead Source” Is a Great Franchisee Story

Dallas has seen firsthand how powerful one strong performer can be for an emerging brand. HelloSugar’s breakout moment didn’t come from paid platforms, broker networks or sophisticated funnels. It came from a single franchisee.

“The franchisee I found had to be a lay-up of a story. Once that person opens, everyone after that will be excited about it,” he said. “We had one franchisee who opened in Flagstaff, Arizona, and was killing it. She was making a lot of profit while going to college at the same time. We got so many referrals through the grapevine because of that story that other things happened organically.”

That story did more than any marketplace could have done in those early days — and Dallas says that’s a lesson most new franchisors need to hear.

“Brands see a lot of pressure because they see brands like Crumbl Cookies selling so many units so fast,” he said. “But that is not always the right strategy. We should think of this as a hockey stick. If you sell in great markets initially, others will come in organically.”

The takeaway: Your first investment should be in unit success, not lead platforms.

Marketplace Leads vs. Direct Leads: Understanding Quality vs. Timing

Every emerging brand wants high-quality leads. But Dallas stresses that channel performance depends entirely on where the brand is in its lifecycle.

At the beginning, Dallas didn’t need marketplaces. He didn’t even need paid ads. “We started off with Instagram,” he said. “I would just publish franchisees on my own Instagram account. Every time I posted, I got a new lead.”

He also attended conferences and franchise shows, sometimes generating just one meaningful lead per event. But for a young brand, that was enough.

The breakthrough came not from marketplaces but from a broker who used an unexpected channel: “We went to a broker and he was using Twitter. He got us five leads, and they were insanely good,” Dallas said. “Those leads were well-capitalized, educated and ready to buy.”

But that level of quality came in year three. “If I went to them year one, when the business was brand new, we wouldn’t have the same reception,” he said.

When to Shift Spend: The Milestones That Tell You It’s Time

Dallas is blunt about the financial implications of scaling through brokers and FSOs. “Brokers are $30,000 pay-to-play,” he said. “If you are using an FSO, you will make no money off your franchise fee.”

That means brands must raise fees, but only after they’ve earned the right. “How do you justify that if you are new?” Dallas said. “Have a lower franchise fee and find them organically. Build a bunch of locations, and once you have proof of concept, you can go to work with the brokers.”

Key Takeaways and To-Dos for Development Leaders

• Don’t rush into marketplaces — build your first great franchisee story first. It will convert more buyers than any paid platform.
• Know when brokers will (and won’t) take you seriously. They want “hot.” New brands must earn it.
• Direct channels outperform early — especially social storytelling. Leads follow proof.
• Raise your fee before relying on brokers or FSOs. Otherwise you’ll have no margin.
• Never oversell territories to justify spend. Healthy territory planning will make — or break — your long-term growth.

Want to learn more about how 1851 helps franchisors grow their franchises with confidence? Visit www.1851growthclub.com and see what we can do for you.