The 3 Business Models of Franchise Broker Networks
In the franchise broker industry there are 3 types of franchise broker networks. The broker mills, the franchise systems and then us (the hybrid).
The Broker Mill
The broker mills have little to no infrastructure or foundation. They have a record of changing their name and ownership every 3 or so years. The bulk of the individuals in their organization who they present to prospective new consultants are actually contractors working for the sale instead of employees and support staff working for the success of the brokers. Without employees and paid support staff, it is virtually impossible to support the brokers/consultants and franchisors.
We know because we actually support our members and in doing so there is an intense amount of back and forth communication while new brokers are learning the business. The first year is the hardest and new brokers need a team to stand behind them and help them with whatever their needs are, from how to talk to a client to make me this tool, to get me an agreement for a special arrangement to help me specialize and create my unique competitive edge. Even the most savvy professionals are new to the industry and most definitely need support. By using the support, it decreases the time it takes to be successful because brokers are learning faster.
The Franchised Network
The franchised broker networks do produce successful brokers. They have to report their successes and failures in the Franchise Disclosure Document so they take more time and consideration before awarding a “Franchise Coach” or “Franchise Consultant” a license.
These groups are territory specific meaning that you can only market and work in a specific demographic region. There is so much opportunity that is missed in this scenario because clients for franchises can come from all over the world. The Franchised Network does have a support staff. They do training as well as research and development. They also charge extremely high upfront and ongoing fees. The price to join a Franchised Network is between 40-80k. The ongoing fees range around 25% of the referral fees and some of them even charge almost a $1,000 a month on purchasing their leads.
Franchise Training Institute
Including a membership in the Franchise Brokers Association (*see agreement for details)
Our goals are different than the other groups. We focus on doing what is right, delivering what we promise, and most importantly breeding success within our membership. We are 100% focused on creating successful franchise consultants and franchisors. To us, this business is not about being the biggest or bringing the most brokers through the system, its about developing the most successful brokers in the industry. We reinvest profits every year into ongoing research and development and into additional employee based support staff.
We have a long term vision for this industry and we are achieving that vision every day. We set out to change this industry in 2008, because the people who were in it weren’t focused on the right things. However, the franchise consulting business is such a unique, exciting opportunity. It is a great business and can open so many doors to those who join the industry.
We are committed to doing it right. We are committed to expanding the opportunity to our franchise consultants exponentially. We are committed to making our consultants businesses more profitable, run easily and with the highest standards in the industry. Consultants have to win their clients trust. That’s easy to do when you are connected with a reputable and service oriented group. Just like we have to do what we say we are going to do, our consultants need to do the same for their clients. Our support, systems and tools allow our franchise consultants to DELIVER.