Understanding the Role of a Franchise Consultant vs. Franchise Broker

date icon 5 minutes to read date icon 30th March, 2024

Choosing the route to franchise ownership can be both an exciting and challenging experience for many aspiring business owners. If you are someone who has just embarked on the process of understanding the industry better, you will quickly learn that there are many different terms used in the industry, which may be confusing.

Two of these terms are the difference between a franchise broker vs franchise consultant. For many new to industry, the terms can often seem like the same thing and even though they are used interchangeably, they are different even though there are blurred lines between them.

In this article, we aim to help resolve the key differences between a franchise consultant and a franchise broker so that you know which party will meet your needs best. Let’s take a closer look.

What does a franchise broker do?

In the world of franchising, there are literally thousands of franchise brands to choose from. One party that can make the process of pairing prospective franchisees well with franchisors is a franchise broker.

But what is a franchise broker? The answer is that this is an individual who typically brokers deals between a franchisor and a franchisee, connecting prospective buyers with different franchise opportunities.

Their services to these buyers are generally free, while the service they extend to franchisors is paid via a commission model for every franchise agreement that is signed.

That is why brokers are said to typically represent franchise brands and franchise owners, while also facilitating franchise sales.

They can do so through multiple marketing strategies to source prospective franchise buyers, such as organizing trade shows, events, and exhibitions, and using other digital marketing tactics to achieve this goal.

If you are wondering how to find a franchise broker, there are multiple industry associations and bodies you can reach out to. But before you do this, it may be a good idea to first consult with a franchise consultant.

What does a franchise consultant do?

Before we dive into what a franchise consultant does, let’s first determine what a franchise consultant is.

These are franchise industry professionals who help prospective franchisees with expert advice, at a fee to the prospective franchisee.

This advice, before the signing of the franchise agreement, can extend to areas such as:

  • Assessing readiness for franchise ownership
  • Assistance with market research
  • Assistance with narrowing down their choice of concepts
  • Business plan development
  • Legal compliance
  • Making introductions to various franchise brand and its network of franchisees
  • Ongoing support after the franchise is established
  • And more

Importantly, when it comes to the question of how to choose a franchise consultant, prospective franchisees are encouraged to do their own research and due diligence by studying the consultant’s background and industry experience, positive or negative reviews about their service online, which franchise brands they may represent or work with, and other factors. 

If you’re new to the world of franchising and want to ensure that you make an informed decision, our team has put together a helpful due diligence checklist. It’ll guide you through every step of the process and ensure that you don’t miss any critical details.

So, what is the difference between a franchise consultant and a franchise broker?

So, the question now is: what is the difference between a franchise broker or consultant?

Firstly, it’s about who the broker/consultant represents. A broker typically represents a franchisor while a consultant works with prospective franchisees.

The second factor revolves around costs and fees. A franchise broker will earn a commission for every franchise agreement signed. This commission is paid by the franchisor and does not affect the amount of the initial franchise fee. It’s about rewarding the broker for finding a suitable and well-matched candidate for the brand. In such cases, prospective franchisees are not charged any fees.

However, the case is different when it comes to franchise consultants who do charge prospective franchisees a fee for their services.

And finally, there is something to be said about the type of services offered. While a franchise broker will market different franchise brands and opportunities using a variety of channels, the main type of service offered by a consultant to a prospective franchisee is helping them understand their rights, obligations, responsibilities, and options when it comes to choosing a suitable franchise opportunity.

Should you work with a franchise broker or a franchise consultant?

And now for the final question: should you work with a franchise broker or a franchise consultant? The short answer is that it will depend on where in your journey you are. If you are a prospective franchisee that is looking for expert advice to navigate the world of franchising better, then hiring the services of a franchise consultant is best for you.

However, if you are interested in working with a franchise brand that your franchise broker has put you in touch with and you’re looking for a sort of middle-man to help secure the deal once they’ve established that you’re a good fit for the brand, then choosing to work with a franchise broker as you work towards the final steps to signing the franchise agreement is the best bet.

Looking for franchise opportunities? Our extensive US franchise directory has you covered

For those of you who are interested in business ownership with a proven business model and extensive training and support as you become a part of a broader franchise network that is invested in your success, franchising is the ideal route to take.

And if you are wondering where to start your search for different franchise opportunities so that you can narrow down your options, Franchise Fame’s US franchise portal has you covered. There, you’ll find all the investment information you need to make a sound business decision.

You’ll also get a history and background of every franchisor as well as what criteria they are looking for in prospective franchisees. In addition to all this, you’ll discover what type of training and support you can expect to receive from the franchisor as you sign up.

All this is aimed at helping you make the most informed decision that allows you to pursue your entrepreneurial dreams with less risk and maximum chance of success. So, what are you waiting for? Browse our US franchise portal now!

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