FSOs Vs. Broker Groups

Understanding the difference between a franchise sales organization and a franchise broker group.

What’s the difference between a FSO and a Broker Group?

There is a common misconception between a franchise sales organization and a franchise broker group and while commonly they work hand in hand there are stark differences. We will explain in this article.

A Franchise Sales Organization

Also known as FSO’s a franchise sales organization serves as the sales team, or development managers for a franchisor. Commonly they will handle all marketing aspects whether it be portal advertising, Google Ads and broker relationships, but most importantly they take a prospective franchisee all the way through true discovery. True discovery will include steps such as initial introduction and overview, qualifying, relaying the franchise disclosure document, revewing the disclosure document, coordinating validation, handling fears and objections, fascilitating or coordinating discovery day and signing of the franchise agreement. A strong FSO can be a valuable asset to an emerging franchise as they can not only reduce staffing costs and requirements for a young franchise but tend to have a wealth of experience in the art form, and yes it is an art, with franchise development. Fast talking sales people rarely make great franchise developers.

One of the biggest mistakes we see emerging franchisors make is assigning themselves or a member of their staff with no franchise development experience as their point person for those exploring their opportunity. When people are looking for the right franchise they want to feel they are investing in something bigger than themselves and FSOs can offer this front line creating the sense of a larger, more experienced organization. Most all prospective franchisees will eventually speak to the CEO and or founders of the franchise but doing so on the very first call, especially while they are running the cash register can be a fatal mistake when it comes to growing your franchise.

Franchise Broker Groups

Today more than ever franchise brokers and advisors play a key role in helping accelerate the growth of a franchise but THEY DO NOT SELL YOUR FRANCHISE. In fact they are not allowed to even if they wanted to. Think of franchise brokers like the gatherers. Through marketing their advisory services and often your brand their primary role is to find strong potential fits for your franchise. Yes they will cover key elements of the business and make sure the prospect meets the qualifications you are looking for but once that is done they hand that prospect off to a franchise development manager. Too often we see emerging franchisors rely strictly on broker groups but skip the skilled franchise development piece and fail to achieve their growth goals.

Franchise broker groups can range in size from a few brokers to hundreds. Good franchise sales organizations tend to have strong relationships with the broker groups and more importantly the good brokers within each group.

Check out Become a Franchise Consultant for more details on exactly what a franchise broker does.

Compensation to franchise sales organizations and franchise broker groups (and brokers) do tend to be fairly similar in that most charge an annual or monthly fee as well as commissions which are usually based upon a percentage of the franchise fee. On occassion FSOs will be compensated in other ways ranging from a royalty share to equity in the franchise.

View the top rated franchise sales organizations and franchise broker groups.

“What an incredible resource! I knew we had a great business but was so confused on how to begin franchising. You all have made this so much easier!”

– Gregory Sayed

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