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What is a Franchise Broker?

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What is a Franchise Broker?

By FranchiseKing, Guest Blogger
Published: January 5, 2012 Updated: July 17, 2012

I’m deeply entrenched in the franchise industry. Like most industries, we have our own collection of buzzwords or jargon. There are words and phrases we use on a daily basis. But you don’t.

For example, industry insiders don’t say, “Franchise Disclosure Document*” when we refer to a legal document that’s required to be sent to all serious franchise buyers. We call it the “FDD.”

This got me thinking about two pretty common words that we franchise industry types use an awful lot when we’re discussing things like new franchise unit sales, and lead acquisition. The words are “franchise brokers.”

I know what they are, but do you?

Franchise brokers match people that are looking into becoming franchise owners with franchise opportunities that seem like they’d be a good fit. Think of them as “matchmakers.’’ 


How Brokers Work

I used to be a franchise broker. Sometimes known as a “franchise consultant,” I received my income from the franchise companies (franchisors).

When I was a broker, I could choose from any one of the 150 or so franchise businesses that were in my portfolio.

A lot of the people that I worked came to me through outplacement offices. (People that have lost their jobs sometimes get a few months of assistance from career counselors that are located at outplacement offices.) Other ways that I’d find prospective franchise owners would be from public seminars that I would occasionally present at, advertising, and referrals.  

When I found someone who was interested in possibly pursuing franchise ownership, I’d schedule an introductory phone conversation in which I would ask some basic questions about their goals, their current financial situation, and other pertinent information.

If I felt that they were pretty serious and financially qualified, I’d have them fill out a fairly lengthy questionnaire and schedule a time for us to meet. (Meetings would be face to face or via telephone.)

During this meeting, I’d attempt to come up with two or three franchise concepts from my portfolio of franchises that I felt may be a good fit. I would describe the opportunity, and if there was enough interest, I’d contact the franchisor and make the introduction.

From that point, I’d be there as a guide and answer any questions that my candidate had during the franchise discovery and research process, giving tips when appropriate. I’d also try to assist them with introductions to franchise lawyers, accounts, and even lenders as they got closer to making a decision on one of the franchises that I had presented.

If my candidate ended up buying a franchise in my portfolio, I would get paid a commission by that franchisor.  (Payment would come soon after the actual franchise contract was signed and the franchise fee was paid.) The commissions were quite generous and that’s why, for the most part, my matchmaking services were free. 


Types of Franchise Brokers

My brokerage career started when I joined my late father’s firm, which was part of a national franchise brokerage franchise. There are several national brokerages today and if you choose to work with a broker, he or she may be part of one.

Other types of brokers you may run across are independent, or brokers that serve in a dual-role; they’re business brokers and franchise brokers. (Business brokers generally sell existing businesses-both franchise and non-franchise.)

Before you work with a franchise broker, you need to learn about their background, and ask them lots of questions*. 


To help you decide if working with a franchise broker could be right for you, I’d like you to read the Federal Trade Commission’s Consumer Guide on Buying a Franchise. There’s an entire section on brokers included. (Plus, it’s a great document to use if you decide to become a franchise owner.)

Investing in a franchise business of your own is a big decision; a good franchise broker may be able to help you find the right one. Just do your homework before you engage in their services.

* Non US Government links 


(The Franchise King®, Joel Libava, is president of Franchise Selection Specialists Inc. Joel provides franchise advisory services to those interested in exploring franchise ownership. He’s frequently called on by the media for his no-spin insights on the world of franchising, and his 1st book, Become a Franchise Owner! was just published) 

About the Author:

Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and recently launched Franchise Business University.


Hi, How are you and your team you are doing very well this so help full. i am going to requesting that can i get the questioner form, which i have to ask to buyer or franchisee who are interested in this business on this email id
Franchise brokers complement people that are usually looking straight into turning out to be franchise's masters using franchise possibilities that will seem just like these people?ˉd become an excellent excellent business broker may have the ability to enable you to come across the appropriate a single.that is suitable.
Excellent advice. Choose a business card made of quality paper stock and designed to impress your customers because your business card is a reflection of your business.
hey Joel,This is my first exposure to Franchise Broker,Thanks for these great tips.
I just know about this Franchise Brokers... Thanks for sharing this information. nice blog Joel...
Thank you Joel for the Great insight and time for writing your article. guardNOW is a new franchise concept in the security industry. We currently have 4 locations two in California and two in new york. It seems as though working with the brokers would be a good idea, however growing and getting word of mouth started seems to be the hard part. Any feedback on how to get that started?
Thanks for sharing this kind of information, it certainly lighten up my mind with regards to franchise broker. I think if one should be good in communication skills as this job description mainly dealing with people and certainly must be armed with lots of knowledge and experienced so people would not hesitate to put on their trust and choose to invest in this kind of business. House in Philippines
Thanks for writing about a complex subject and making it easy to read. , and found the info even useful for my  video production company .  G oing to look out for your other work now, regards
Thanks for defining what a franchise broker is. Thanks for sharing. In my opinion franchising is also good business. I see many business franchiser that did well. Apartment for Rent in the Philippines, Apartment for Rent in Mandaluyong
Great post Franchise King. A lot of people don't know where to turn when it comes to starting a franchise.

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