Franchise Broker vs. Franchise Consultant

Written by: Patrick Findaro
Last Updated: May 14, 2021
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Franchise Broker vs. Franchise Consultant

Between these two, which one is better? Franchise Broker vs. Franchise Consultant

Many entrepreneurs that are looking to buy a franchise often ask, what’s a franchise consultant? What’s the difference with a franchise broker? Which should I work with? So in today’s video, I’m gonna address the three types of categories that basically encompass franchise consultants as well as franchise brokers.

 

1. 400+ brands

So the first one is a franchise broker. This is an individual or a firm that might represent anywhere from 2 or 1 to 400-plus franchises. Generally, the franchisor compensates a franchise broker as a percentage of the franchise fee. We’ve seen compensating fees being to franchise brokers that range anywhere from 20% to 70% plus.

They generally only receive compensation if a candidate that they present moves forward and invests in a franchise with that franchisor who’s paying the commission. Many of the franchise brokers receive little training and are generally more…many franchise brokers have very strong sales acumen, but at times, they do not receive great training in terms of really understanding the different franchise opportunities, as well as different industries. A franchise broker might be well specialized in one or two industries based on his or her prior career experience.

But at the end of the day, they largely operate as a one-man show where they’re part of a larger network where they have contractual… a franchise broker might be part of a larger network, where that network has negotiated referral contracts with 100, 200, 300, 400 franchises. So the franchise broker essentially is only compensated if a candidate he presents invest in one of those franchises.

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Emerging brands

Many of the franchise networks that we are aware of do not do a very good job in terms of vetting what franchises they create partnerships with so that their brokers can go out and sell them. There are a lot of emerging brands that haven’t even proven themselves, and maybe have 1 location, 2 locations, and they’re looking to sell 50, 100 locations in the first year. At times, these franchise networks do not do a great job in terms of vetting the different opportunities… So, it’s important to talk to someone that presents themselves as a franchise broker or a franchise consultant. How are they compensated? And if they only are compensated by their franchisor. What’s to stop them from presenting the most lucrative franchise option to you. One that is gonna earn them the most money and not necessarily earn you the most money.

 

Franchise Broker vs. Franchise Consultant

 

2. Franchise Consultant For Franchisor

So the second category is franchise consultants that focus on franchisors as clients. Generally, these franchise consultants work with businesses that might be well suited to a franchise model. So they’ll work with a franchise attorney, operations manual consultant. As well as all different other parties to basically create a franchise system for an emerging business. Franchise consultants that have franchisors as clients might also help. With recruiting, marketing, and other facets to help the franchise system grow.

 

3. Franchise Consultant For Franchise Buyers

The last type of franchise consultant is those that are really focusing just on franchise buyers. Vetted Biz and Visa Franchise offer solutions to both Americans and foreign nationals interested in buying a franchise where you engage our services. And we can look at any franchise available at the time of this video on our portal, vettedbiz.com. We have 1830 franchises. We seek to add another 200 this year, as more and more franchises become publicly available. And we’re able to take the most pertinent data and you can search through it on our platform.

How it generally works with franchise consultants that work directly with franchise buyers is that. The franchise buyer after the initial consultation will engage the franchise consultant to do a study anywhere from two to three weeks. After that, arrange all the phone calls with franchisors, franchisees. If they need to arrange calls with the franchise…

 

Work with ANY Franchisor

The franchise consultant is largely acting as the quarterback. To ensure the entire process of finding, vetting, and buying a franchise is going forward in a timely fashion. Franchise consultants like us at Vetted Biz and Visa Franchise are able to work with any franchisor and we encourage you to look at Vetted Biz, and not just go with options that are presented by a franchise broker that you look on a public domain, as there are many franchisors that do not compensate franchise brokers. By our studies, the biggest franchise broker network only has 500 franchises that they offer to would-be franchise buyers, were for us at Vetted Biz, we have nearly 4 times the amount of opportunities, at 1830, that we can explore on your behalf if you’re looking to purchase a franchise business.

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