Do Broker Groups Vet Their Franchises?

Franchise Broker Leads

Understanding a little more about how and why many of the broker groups select which brands they choose to work with might help answer this question but the simple answer is some do more than others.

With many of the groups the more brands the better as they use the fact that they have the largest list of represented brands as a talking point when it comes to recruiting new brokers plus they make a lot of money off the annual fees the brands pay to be a part of their group. In these cases the more the merrier so the vetting process is next to none. Other groups feel their personal reputation is on the line with the brands they represent so tend to be a little more meticulous.

That being said, there is no such thing as a perfect franchise, no such thing as a guaranteed business and yes, some franchisors do fail despite their best efforts and seldom is this the fault of the broker group as their job is to promote.

Now some broker groups get a little carried away with their lack of vetting process despite what they claim… Below is quote from a FranServe consultant…

“We have a FranTastic 500 list as well as a Game Changer list which our brands can be listed on. I’m not sure I quite understand it as there are some brands that have been on the FranTastic 500 list for 2 consecutive years yet have no franchisees.”

So clearly a group like FranServe does not overly vet their brands and takes it in the other direction, even promoting them as top brands despite the fact they are not supporting any franchisees. FranServe represents many fantastic brands but our guess is getting on the top 500 hundred list is more financial than what someone like Franchise Business Review does when they vet brands.

Bottom line as a franchise broker it is important that YOU do your own homework when it comes to the brands that you suggest to your clients. Below is a link to an article where several franchise brokers’ reputations were damaged by promoting bad opportunities leading to significant financial hardship for those that followed their advice. This fiasco was totally the fault of the franchisor but unfortunately several brokers got caught in the crossfire.

TAPP PALMER, Clubstore Outlet Franchise: What Happened?

Unfortunately there are other cases like this but this one was massive. Again, most of the brands represented by the broker groups are good opportunities for the right people but it is important that you do your own homework.

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