Franchise Glossary
Franchise Broker
A third-party salesperson who connects prospective franchisees with franchise opportunities, typically paid by the franchisor.
Franchise brokers (also called franchise consultants or referral sources) earn commissions from franchisors for bringing in qualified candidates. Because they are compensated by the franchisor, their recommendations may not always be in your best interest. While some brokers provide valuable guidance, it's important to conduct your own independent due diligence. Broker arrangements must be disclosed in the FDD under Item 1 and the franchisor's use of brokers appears in Item 5.
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