When wondering how to franchise a business, many people will often confuse Franchise Beacon with the types of service that one can expect from Brokers. The truth is that we offer to How to franchise a businesscompletely different services.

The primary role of Franchise Brokers is to provide pre-qualified leads to franchisors in return for a commission. Basically the Franchise Broker sends the Franchisor referrals. They do this by talking to the client, finding out what the client’s interests are, and then finding 2-4 concept (out of the 100-200 that the broker represents) that A> fits the client’s needs B> has good validation and C> pays a high commission.

Your relationship with Franchise Beacon will be extremely different. We work with you during the entire franchise sales process, including helping the client understand the franchise opportunity, providing them with franchise information, and helping the franchisor qualify the franchisee and evaluate if they are a good fit for the franchise business. We also help you evaluate where you are spending your advertising dollars to get the most return on your investment. Beacon will never propose multiple franchises to your leads; they are your leads, and they will be shown your concept.

 

Here is a comparison of the roles and responsibilities of a franchise consultant VS a broker.

 

 

Responsibilities Brokers Franchise Beacon
Primary function Provide Qualified Leads Full Franchise Development.
Number of Concepts Represented Generally 50 – 200 Concepts Under 10
Number of concepts an individual broker or salesperson would actively promote Generally 50 – 200 Concepts 1 – 10
Exclusivity Generally non-exclusive.  Often, franchisors will have relationships with multiple Brokers. Generally exclusive.
Reporting obligations None Monthly
Contractual obligations None yes
Required marketing None, although they may ask franchisors to attend/sponsor annual conventions Negotiated levels of marketing expenditure on the part of the franchisor included in most contracts
Fees Success fees only, with averages ranging between $15,000 and $30,000.  Some brokers will try to take a percentage of the royalty as well (we strongly recommend against this). Franchise Beacon typically charges a small management fee and a commission of 25% on Franchise Units and Area Developers closed. Franchise Beacon does not take any of our client’s royalty.
Responsible for data entry Franchisor Franchise Beacon
Responsible for sending material Franchisor/Broker Franchise Beacon
Responsible for pre-qualification Broker Franchise Beacon
Responsible for follow-up Franchisor Franchise Beacon
Responsible for Discovery Day Franchisor Franchise Beacon
Responsible for FDD Disclosure Franchisor Franchise Beacon
Responsible for document management Franchisor Franchise Beacon
Responsible for final qualification and the actual decision on the award of a franchise Franchisor Franchisor

If you want to learn more about how to franchise a business, please contact us.