Mario Altiery from Upside Group Franchise Consulting, a full-service franchise consulting firm, introduces the first video in a series on properly utilizing brokers in franchise sales. Many franchisors struggle converting leads to sales unless leads come pre-warmed from brokers. This over-reliance on brokers to generate and qualify sales is problematic since brokers claim 20-50% commission on the franchise fee. After broker fees and sales team compensation, little remains to cover training, support, and other expenses, putting franchisors in financial jeopardy.

The ideal blend utilizes brokers strategically alongside organic leads from websites, PR, locations, portals, and shows costing nothing to generate. By over-relying on expensive brokers, brands lose control of lead sourcing, sales pipelines, cash flow, and, ultimately, the health of the system. Proper broker use must be rebalanced as one component of an omnichannel lead generation approach.

Altiery plans future videos expanding on strategies to optimize brokers’ positioning, determine ideal sales team structures, and backfill funnel gaps, which are currently ceding territory to brokers through better lead nurturing and qualification upstream. For now, brands should ensure they have diverse lead generation sources, convert more leads directly or through sales teams, and keep brokers filling narrow gaps rather than dominating deal flow.

Over-dependency points toward systemic issues in qualifying and selling to leads from alternate channels. Facing sales challenges? Consultants find the holes in your sales system, your equipment, and your team. This prevents more channel issues and cuts down on those high-priced broker deals. Plugging holes in qualifying, lead management, and sales training dramatically alters franchise economics.
If a brand hits financial struggles despite closing many deals, excessive broker usage siphoning the lion’s share of fees is likely the culprit. Rectifying over-reliance resets the trajectory toward profitability and scalability.
Transcript:

Hi everybody, this is Mario Altiery from Upside Group Franchise Consulting. We’re a full-service franchise consulting firm, so we do everything from franchise development and franchise sales to franchise documentation, like franchise manuals and guides. We also handle all the strategic planning—we’re basically full-service, from the smallest brands that are just starting up to large brands that need revamping. We’ve had success at all different levels over the years, and as you can see on the screen, we’ve been doing this since 1999. So we’ve been at it a long time.

I wanted to do a short video today, but I think we’re going to turn this into a series where we’ll break this topic down into small, digestible parts. Today, I really want to talk about the use of brokers. I used to speak on this at the International Franchise Association quite a bit, and I wanted to make sure people understand how brokers actually work and how they should fit into your business.

What I’m seeing now, as franchising has expanded, is that there’s such a lack of professional salespeople that many have a hard time converting any leads—whether those leads come from brokers or other sources. So if they get leads organically through their website, through PR, through people walking into locations, calling from franchise portals, or franchise trade shows—all those different places—they tend to have a hard time with them if parts of the sales process haven’t already been handled or if the lead hasn’t already been warmed up.

I think there could be a bunch of reasons for this. I’ve had discussions with folks when I’ve taught before, and I think I have a pretty good idea why. But the end result is that you end up with an inordinate amount of sales going through brokers.

Now, brokers are fine if used properly—but they are a huge portion of your franchise fee. For example, if you have a $40,000 franchise fee, you might pay a broker