Franchise Consulting Companies vs. Franchise Broker Networks

What is the difference between a franchise consulting company and a franchise broker network?

At the end of the day, members of a franchise consulting company ( at least in this sense ) and members of a franchise broker network do the same thing. They work with prospective franchise buyers helping identify and explore potential franchise investments. Their business models are the same in that they are paid commissions by the franchisors that they represent for new franchisees that they bring to the table.

That being said, there are some key differences, and here are a few.

1. Franchise broker networks are made up by independent brokers. What we mean by this is despite belonging to a certain (or several networks), each individual broker is completely independent in branding, marketing, etc. Even though they may belong to a network such as IFPG or Business Alliance, they operate as “Sally’s Franchise Consulting” or “That Franchise Guy” and all marketing of their brand is completely on them. Members of franchise consulting companies, such as Success Franchise Advisors or FranNet all are part of a collective brand, meaning they all operate under one brand name. The benefits of being part of a collective brand are fairly obvious but still many franchise brokers do prefer to be their own brand.

2. Franchise Broker Networks tend to be larger than most franchise consulting companies. Broker networks tend to be recruiting machines and make a large amount of money on the $20k – $25k recruiting fees they charge to join. For this reason they can sometimes be less selective in the brokers they will bring on board regardless of the potential or lack thereof they see in a prospect. That does not mean they don’t offer excellent training and support, but if a broker sucks it has little reflection on the broker network as again, it is “Sally’s Consulting Company” that is no good, not the broker network. Franchise consulting companies tend to be slightly smaller and in order to best protect their brand recognition tend to be a little more selective in who they choose to join their group.

3. Franchise broker networks tend to represent more franchises. Regardless of which path you choose one thing you will quickly learn is that representing the most franchises will have very little, if any, impact on your success as a broker but most broker networks represent several hundred franchises while a consulting company may only represent 100-200. The reason for this is two-fold. One, having the most franchises is a powerful broker recruiting tool and two, franchisors typically pay large annual fees to be part of a broker network. Since brokers within the various networks are their own independent brand, if they show a prospect a crap franchise it only reflects badly on them, not the broker network. Because of the collective branding of most franchise consulting companies, promoting not to stellar franchises can reflect poorly on the entire group and their brand. For this reason most consulting companies tend to be a little more selective in the brands they choose to represent.

At the end of the day success or failure is yours to be had and choosing either path and just requires weighing the pros and cons of each. 

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