Understand who is helping you choose a franchise

Four roles you may encounter

These are common descriptions. Titles and arrangements vary, so confirm the actual relationship.

• Company sales employee. Works for the franchisor and explains its offer. Compensation may include salary and commission. Their information can help you understand the program; verify important claims against the documents.
• Franchise broker. May introduce you to several brands, often from a selected group. Brokers are commonly paid by a franchisor when a purchase goes ahead. Ask how broad their selection is and how recommendations are made.
• Outsourced franchise sales team. A separate business hired to handle sales for a franchisor. It may work much like an internal sales department, with compensation that can include commissions or other arrangements.
• Your own independent adviser. A qualified franchise lawyer or accountant you engage can review the proposed agreements or finances for you. Agree on the work, fees and relevant experience, and ask about any relationship with the seller.

The International Franchise Association’s seller guide explains common sales roles. The IFA is an industry association.

Questions to ask early

1. Who employs or engages you, and whose interests are you working for in this process?
2. Which brands do you consider, and how do you decide which to present?
3. Who pays you, and how is that payment calculated?
4. Does your compensation change depending on the brand or transaction? Are there other incentives or referral payments?
5. What work will you do for me, and what should I investigate separately?
6. Where can I verify the claims or figures you have shared?

The FTC recommends checking a broker’s selection process and compensation. Understanding payment arrangements helps you put recommendations in context; it does not establish whether an individual recommendation is sound.

Keep your own review moving

Speak with current and former owners, read the actual disclosure and agreements, and arrange independent legal and financial advice. For a US offer, use our FDD guide to investigate sales or earnings claims and other obligations.