When entrepreneurs decide to join an organization to become a franchise consultant, also known as a franchise broker, one of the main questions is “how will I get paid?”
Fee
The franchise broker is sometimes considered very similar to a recruiter. When the match is made between the franchisor and the franchisee, the franchise broker receives a payment. Franchisors are represented by the consulting organization with which the franchise consultants are affiliated. The consultant must be part of the consulting organization to earn the commission.
Franchisees do not pay anything beyond the franchise price originated by the franchisor. The franchisor pays a predetermined amount when the deal is made. The amount of the fee is agreed upon with the consulting organization when the franchisor first engages their services.
Referral fees that the franchise consultant typically earns range from $10,000 to $15,000; however, it can cost up to $50,000 if an entire territory is sold.
How fees are earned
Franchisors are willing to pay these fees to find quality franchisees to run their businesses. Franchise brokers earn these fees primarily because they qualify potential candidates in detail to determine if they are a good fit for a particular business. At the same time, they focus on the franchise in which the franchisee is most likely to succeed; thus benefiting both parties.
Processing and payment time
Franchise consultants typically don’t have to wait for the franchise to open to get paid. Earned fees are paid at the time the franchisee pays their franchise fee.
In general, there is a fairly quick turnaround time for the consultant to receive their earnings; therefore, the potential to generate fairly stable income.
