The Franchise King® | Learn How To Become A Franchisee

3 Things Franchise Brokers Would Prefer To Keep Under Wraps: #2

brokers and consultants in franchising

There are several things today’s franchise brokers would like to keep under wraps.

The 3 things franchise brokers would prefer to keep under wraps that I’ve decided to share with you aren’t bad things. Not at all. They’re just things that you-the prospective franchise business owner should know.

(This post may contain affiliate links. Please read my disclosure policy).

Isn’t that why you’re here?

Don’t you want to have as much information on franchising as possible?

Franchise Broker Information I Shared So Far

In Part 1 of this 3-Part franchise blog series on franchise brokers-and some of the things they prefer to keep under wraps, you learned something really interesting about franchise brokers and the franchisors that use them.


Most franchise brokers work with the same franchisors, and most franchisors work with all of the same brokers.

So, what does that mean for you ? Why is it important for you to know?

Don't miss out!
Free Franchise Buying Checklist!
Every Franchise Buyer Needs This
Invalid email address

It’s important for you to know so you won’t waste time working with two franchise brokers at the same time since they’re probably working with the same franchisors. It’s a waste of time, and can lead to serious confusion. It’s hard enough investigating two or three franchise opportunities at once, even if you’re doing it right.

A Note About Franchise Brokers

I read this a while ago. It was posted on a now-defunct franchise forum. It’s pretty harsh, but it’s true.

It is important to point out that not all brokers practice their craft the same way, which highlights the fact that obfuscation is not an essential element of franchise sales. Each of the major broker networks, while disclosing that it is paid by the franchisor, in one form or another represents that it provides no-cost, beneficial services to prospective franchisees. On some of the web sites, though, a prospective franchisee is led to believe that the broker is its coach, adviser or consultant. Indeed, some brokers describe prospective franchisee as their clients, even though they are paid and are agents for the franchisor. An assertion that the prospective franchisee is the client when the broker is a paid agent of the franchisor is totally unsupportable. The conflict of interest and the unfairness to a potential franchisee are apparent.”

Michael Seid, MSA Worldwide

3 Things Franchise Brokers Would Prefer To Keep Under Wraps: #2

Who are you? Seriously.

When you work with a franchise broker, who are you?

The answer…

Wait. Let me do it this way, instead.

Who aren’t you?

The answer: The client.

When you work with a franchise broker, you  are not their client.

The franchisor is.

You only “feel” like you’re the client when you’re working with a franchise broker.

Just Follow The Money Trail

Most franchise brokers (who sometimes call themselves consultants) offer their services for free. That’s because they’re paid by the franchisors. It’s really easy to follow the money trail. Unless…

Some franchise brokers charge a fee. They call it a consulting fee or a commitment fee. It can range from $50 to a few hundred dollars. Some brokers feel that by charging a fee they’ll be able to get only “serious” prospects. It’s up for debate, but since I’m not a broker anymore, I’ll leave it to the brokerage community to do.

The question:

If you work with a franchise broker who charges a small upfront fee, does that change things? Are you the client since you’re paying a fee?


The franchisor is the client because they’re paying the big  fee.

The franchisor is the client because they have a signed sales agreement with the broker. A signed contract.

Does it matter?

Yes. Of course it matters.

Whenever money changes hands because of something you’ve said yes to, a sale has been made. In this case, there are two  sellers.

The franchisor and the franchise broker.

They both  make money when you send in your check for the upfront franchise fee and sign the franchise contract.

It’s not a bad thing. But, it is a “thing.”


Full Franchise Broker Disclosure

I’m not sure you know this about me, but I’m trying to change the franchise world.

Part of the change that needs to take place has to do with disclosure. Franchise buyer’s need to know who’s who in the franchise broker-franchise buyer relationship.

My suggestion:

Franchise brokers need to disclose their relationship with you-the prospective franchise owner.

In today’s day and age-the age of transparency in business, it’s the right thing to do. And it’s important for you to know who’s who.

In Part-3 of this series on the 3 Things Franchise Brokers Would Prefer To Keep Under Wraps, I’ll unwrap something else for you.

Here is Part 3 

Please Share This Article!
Note: When you buy through links on our site, we may earn an affiliate commission. In addition, I've started to use AI to help me craft better article titles and headings.
joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes. For over 20 years, I’ve been showing people how to make smart, informed decisions on franchises to buy, and I can help you, too!
P.S. I'm not a franchise consultant/broker.

Joel is the absolute best. Do NOT engage in any franchise until you have consulted with Joel. He will save you tons of money and grief. I am absolutely convinced that if I had found Joel before I signed on all the dotted lines and spent some money with him, I would have avoided my looming crash and burn."
- Andy Mark
Free Franchise Tools Franchise Compatibility Quiz Net Worth Calculator
VIP Franchise Newsletter

Recommended Reading
How Franchises Work
How Much Is A Franchise?
Pros And Cons Of A Franchise What Is The Franchise Fee? How To Buy A Franchise
Best Franchises To Own

Top 33 Business Opportunities Starbucks Franchise Facts
The Great Clips Franchise
Featured Franchises!
10 Best Franchise Websites
About Franchise Consultants
How To Read A FDD
Questions To Ask Franchisors
Questions To Ask Franchisees Franchise Discovery Day Franchise Reviews
A Unique Franchise Loan

Top 10 Franchise Buying Tips