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The One Thing New Franchisors Need To Avoid At All Costs

franchisors and franchise brokers


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New franchisors have it tough these days.

First off, they have to be really different. I mean really different. They have to stand out with their products, services, or their way of doing business. Or, all three.

Then they have to compete with thousands of other franchisors who think their offerings are the bomb, too… on franchise portals and franchise directories.

But, other franchisors aren’t their only competition. They have to compete for attention; the attention of all sorts of people who have a desire to be their own boss. And, getting their attention is getting increasingly difficult to get. Because it’s noisy out there. Noisier than it’s ever been.

Consumers are being bombarded with thousands of marketing messages every day.

But, that’s not what this post is about.


An Article

I ran across an article about turning a business into a franchise last week. Yesterday, too as a matter of fact. I guess it was published on two different small business websites.

For the most part, the article was pretty well written. It was factual business-like. Non-fluffy, even. An easy read.

But, there was a lead-generating suggestion that was made to new franchisors in the article that was 100% wrong. And, being the way I am, I couldn’t let the really poor suggestion I’m about to share with you, slide.

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The One Thing New Franchisors Need To Avoid At All Costs

New franchisors need to avoid franchise brokers and franchise brokerage groups at all costs.

That’s right: Stay away from franchise brokers if you’re a new franchisor.

In my experience, it’s a massive waste of time for new franchisors to reach out to franchise brokers and franchise broker networks.

I’m don’t know why the author of the “franchise your business” article suggested new franchisors work with franchise brokers and franchise brokerage groups…I really don’t. But, since I was part of a franchise brokerage group-I’m pretty darn qualified to weigh in on, (and correct) the author’s suggestion.

Franchise brokers are only paid when they make a successful “match.” In other words, when their candidate chooses and buys a franchise the broker matched them too…one that’s in the franchise broker’s portfolio of franchise opportunities-the broker gets paid. And, those paydays are large. Large enough to enable today’s franchise brokers to offer “Free Franchise Consultations.”

But here’s the thing. Franchise brokers won’t and don’t generally present new, untested franchise opportunities to their candidates. Would you like to know why?

Because their chances of getting paid a commission fall somewhere between slim and none. Plus, their candidates have no way of doing basic franchise research. The kind of research that can provide a path to Yes. A path to a franchise agreement being signed. A path that leads to a payday for the franchise broker.


Think About It

Pretend you’re looking into franchise ownership, and stumble upon a franchise that just launched….a brand, new franchise concept.

You like the concept…it’s different, and you feel you’d be a good fit for the business. Except you can’t really do the kind of research you want because there aren’t any franchisees (yet) to talk to about the business. To find out if there’s money to be made. To ask about the products or services. To get details on when break-even occurs. Stuff like that. Important information. The type of information that will help you make an intelligent, fact-based decision on whether or not you should buy the franchise. Drats! You really liked that franchise.

Imagine How A Franchise Broker Would Feel

Think about it for a moment. What if you found this cool new franchise opportunity through a franchise broker.

Put yourself in the franchise broker’s shoes. The shoes of the person who doesn’t get paid unless she successfully matches you to a franchise that’s in her stable.


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Franchise brokers-because of the way they’re paid, can’t waste time on low-probability things. Like brand-new franchise opportunities.


Lip Service

That’s what new franchisors are going to get from brokers and broker networks they approach.

They’ll tell these enthusiastic new franchisors how much they “like” their concepts. But, they’re not going to waste their time with a new concept.

Unless, the franchisor approaches an independent franchise broker who needs more franchises to present.

Some franchise brokers-independent ones and even brokers who are aligned with brokerage groups, push the fact that they have access to “hundreds” of franchise opportunities. That’s because people like to have choices…lots of them. So, they’ll sometimes add franchises to boost those choices. But, will they present them? It depends.



There are exceptions to any rule, I suppose.

A franchise broker, or the powers that be at franchise brokerage headquarters, can decide to take on a brand-new franchisor.

If they did, the franchise concept would have to be a truly exceptional one. A franchise concept that was so different and so mind-blowing…


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I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes. For over 20 years, I’ve been helping people make smart, informed decisions on franchises to buy, and I can help you, too! #thefranchiseking
The fantastic thing about Joel is his neutrality. Because he is not getting an incentive fee, he will always give you the advice that you need (even if not what you necessarily want) and that's pretty unique these days. Thank you Joel!"
- Nic Church, France
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