Out of every 10 franchise consultants you will find, probably 8 or 9 of them are actually franchise brokers and not consultants. While they may seem similar, they serve different purposes. Understanding the distinction between these two can significantly impact your franchise journey. Here’s a quick breakdown based on my 40 years of franchise expertise.

Table of Contents

1. What Is a Franchise Broker?

2. What Is a Franchise Consultant?

3. Conclusion

Franchise Broker: Matchmaker

A franchise broker is like a matchmaker for franchises. They’re there to help match you with the right opportunity based on your skills, budget, and goals. Bear in mind that their main business interest is to bring the two parties (franchisee and franchisor) to conclude a deal resulting in the franchisor selling a franchise opportunity to a franchisee. The deal will no doubt involve a payment from the franchisee to the franchisor. In return for the receipt of such funds the franchise broker is rewarded (remunerated) by the franchisor for helping him/her close a deal. This remuneration is based either by way of a fixed fee or a percentage of the joining fee.

In some cases the franchise broker helps the franchisee with “so-called” consulting services supposedly helping the franchisee reach the correct decision.

What are they supposed to do? 

• Help you find the right franchise—quickly and easily.
• They’ll present you with options based on your preferences.

What do they actually do?

• Sell you a franchise in order to get paid a commission.

Pros:

• No upfront fees – Brokers are paid by franchisors, so it doesn’t cost you anything.
• Quick results – You get a list of potential franchises without spending a lot of time or energy.

Cons:

• Limited support – Once you pick your franchise, you’re mostly on your own and left in the hands of the franchisor.
• Not much strategy – Brokers don’t give you detailed guidance for running your franchise.

Question to ask:
To what extent does the franchise broker (often calling himself a franchise consultant), have the best interest of the franchisee in mind if he is paid by the franchisor to help close a deal?

Franchise Consultant:

What is a franchise consultant? Think of them as your personal business coach. They’re the ones who’ll be with you from the start to the finish, helping you every step of the way. From picking the right franchise to setting you up for long-term success, they offer in-depth advice and strategies. Since they are paid by you and not by a franchisor, they will be in your corner protecting your interests during your process of finding the best franchise opportunity for you - not the franchisor and not the franchise broker.

What do they do?

• Assess whether buying a franchise is the right choice for you, based on your personality, experience, and financial situation.
• Help you find a franchisor with a proven success record, who has happy, profitable franchisees that encourage others to join.
• Ensure the franchisor provides the necessary tools for your success, including a strong training program, an operation manual, and ongoing support.
• Assist in creating a business plan and evaluating your options.
• Support you in franchise negotiations, working with your franchise lawyer to secure the best deal, and ensuring your attorney acts in your best interest.

Pros:

• Expert advice – Consultants provide personalized, detailed guidance that’s tailored to your needs and goals and not needs and goals of others.

Cons:

• It costs money – Unlike brokers, consultants charge for their time and expertise.

Conclusion

When diving into franchising, understanding the difference between a franchise broker and a franchise consultant is key. Franchising is a long-term investment, so take the time to choose the right partner. Whether you go with a broker or consultant, make sure they align with your goals.

Want to dive deeper into franchising? Feel free to explore more tips and insights from my other blog posts based on my experience.