Knowing how to work with brokers will come in handy for you as a franchisor. This is because one of your most important functions as a franchisor is the recruitment of talented franchisees. Franchisees are individuals, who like yourself, have lots of business acumen, and want to pursue the many advantages of franchising.

Where does a franchise broker fit into recruiting franchisees? The broker, or brokerage firm, is a third party that assists you in matching your profile of the ideal candidate with an individual who fits that profile.

What Does A Franchise Broker Offer Franchisors?

Brokers save the typical franchisor time and money and for that, franchisors are willing to pay a commission to the broker that matches them with the perfect candidate. Brokers work hard to build their network of aspiring business owners who see the advantages of investing in a franchise business rather than a sole proprietorship. In other words, brokers cultivate a large pool of potential candidates.

Franchise brokers are paid a commission, which incentivizes them to focus on finding a candidate who meets your criteria for experience and access to capital. On average, a broker can earn between $15,000 and $30,000 in commission, or more, if they introduce a franchisor to a candidate who fits your profile and has the means to commit the time and money to become a franchisee. The franchisor only pays the commission if the candidate signs the agreement to become a franchisee.
At first glance, it might appear unduly burdensome that the franchisor needs to pay such a hefty fee, but the broker commission is often part of the franchise fee that the candidate pays upfront when they sign the franchise agreement.

Franchisors begin collecting royalty fees from their franchisees. Franchising is forthose willing to play the long game.

Franchise broker networks charge franchisors a fee for membership and then assist their clients (the franchisors) in finding the best possible candidates.