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The shift is happening — and it’s happening fast, especially for broker-conditioned franchises.I’m getting more and more calls that sound like this: “We used franchise brokers for growth in the past, but that’s no longer part of our plan moving forward.”So… how did we get here?Join me on Franchising Coffee &amp; Analytics – October 13 at 2 p.m. CST (<a href="https://streamyard.com/watch/Ae8EbkrGQhFX?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-franchise-broker-slowdown-2730406" target="_blank" rel="nofollow">REGISTER HERE</a>). And don’t forget to register for FranCamps (<a href="http://www.1851francamp.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-franchise-broker-slowdown-2730406" target="_blank" rel="nofollow">www.1851francamp.com</a>) — real peer-to-peer franchise growth consulting and planning. (Miami is in December.)<h2>Why the Broker Slowdown?</h2>For franchisors, the broker model made perfect sense for years: leverage someone else’s network to sell your brand. It worked — until it didn’t. Now, there are some clear friction points:<ul><li>It’s not just “pay to play” anymore. It’s pay to attend conferences, pay to wine and dine, pay for the B.S. — and then, maybe your brand gets shown to a candidate. Even then, you're flooded with territory checks and light on serious buyers. &nbsp;</li><li>Candidates deserve transparency. Some are getting oversold on “shiny object” brands. When franchisees underperform, it puts growth plans on pause and leaves franchisors holding costly, reserved territory with no ROI. &nbsp;</li><li>“The franchisor pays us” is a blind spot. Let’s call it what it is: franchisee writes the check to the franchisor, who writes a big one to the broker. I don’t think that’s a bad system — as long as everyone knows how the game is played. But too often, the broker vanishes when things go sideways. &nbsp;</li><li>Costs are ballooning. I’ve heard of commissions as high as $75K… even $120K. Some brokers are asking for royalty percentages or equity. That’s fine — if the franchisee performs. But if total acquisition costs (including broker fees and memberships) exceed the ~$25K you’d pay for an organic deal, it may not pencil out. &nbsp;</li><li>The good brokers aren’t the problem. Many brokers are mission-driven. They don’t just push the highest-paying brand — they genuinely want to help candidates change their lives. But others? They shake down franchisors or ignore what candidates want. (“I know you want senior care… but here’s a donut brand.”)</li></ul><h2>The New Challenge for Franchisors</h2>We’re facing a perfect storm: Higher costs. Less transparency. Fewer deals. More broker competition. And franchisors growing frustrated with validation and performance.So what happens next?Franchisors are pivoting back to organic — but here’s the catch: Your biggest competition isn’t other brands — it’s the broker.You’re no longer just competing with brands in your vertical. You’re competing to be seen at all. Brokers are filtering what candidates see — and your brand may not even make the cut.So how do you break through?<h2>What to Do Next</h2><ul><li>Turn up your positioning. Crank up the messaging. Create a brand drumbeat. Use every asset in your system to define your candidate persona — then market directly to them. &nbsp;</li><li>Change your sales process. Brokers succeed because they’re educational coaches. Take a page from their playbook. Stop selling in Call 1. Instead, offer a no-commitment educational conversation: What is franchising? What does a good fit look like? Coach first. Sell later. &nbsp;</li><li>Don’t chase the biggest commission. If you’re an emerging brand, don’t over-index on the broker network. Many do — then realize they’ve drained too much fee money to support the franchisee properly. Cash flow gets tight. Everyone suffers. &nbsp;</li><li>Be patient. I’ve said it so many times that now I hear others quoting it: 6.4 months. Under $500K. That’s how long it takes for a lead to go from impression to inquiry — unless you have the capital to speed it up. And most don’t budget enough.</li></ul><h2>Your 2026 Budget Playbook</h2><ul><li>Audit your broker deals. Pull a report. How are your broker-driven franchisees performing? Compare their AUVs to those from organic and referral sources. Budget accordingly. &nbsp;</li><li>Tighten up territories. Signed deals and grand openings drive momentum. But oversell your space and you’ll miss out on the next hot candidate. &nbsp;</li><li>Nail your positioning, website, and nurture flow. These should educate and guide — not scream “buy my franchise.” Show how you coach people into becoming franchisees. &nbsp;</li><li>Keep the conversation going. The brands that shift from 60/40 broker/organic to 40/60 (or better) will be the ones driving steady, predictable, profitable growth in 2026.</li></ul>

1851 Franchise Coffee & Analytics image with blue background and photo of Nick Powills

Why Franchisors Are Leaving Brokers for Organic Franchise Growth

1851 Franchise

The broker model made sense for years, but a lack of transparency, rising costs and subpar leads pushed many franchisors away. Now, franchisors are navigating organic growth in a new landscape.

The Franchise Broker Slowdown — How Did We Get Here?

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