Do I Need a License to Become a Franchise Broker?


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Franchising isn’t anything new these days, but there are still a lot of uncertainties associated with the franchising world, particularly in regards to the function of a franchise broker. For most individuals, franchise brokers are a relatively new entity, and the full capacity in which they function remains vague.

If you’re interested in becoming a franchise broker, you may be wondering what type of education, certification, or license you need — and rightly so! You want to be qualified and prepared when you step into a new position. So let’s look at what it takes to become a franchise broker. 

What Franchise Brokers Do 

The prospect of finding a perfect franchise match is quite intimidating to navigate alone, especially for first-time franchisees. People are looking to open franchises, but they need guidance to do it right. That’s where franchise brokers come into the picture. They’re skilled professionals dedicated to putting franchisees into businesses they’ll love!

Simply put, the job of a franchise broker is to act as the intermediary between a franchisor and a franchisee. They help potential franchisees narrow down the franchise opportunities available to them, and aid them in investing in a franchise that fits their interests, experience, and budget. 

Once the franchisee agrees to buying the franchise, the franchise broker gets a referral fee for their service from the franchisor, which is usually 40-50% of the franchisor’s fee. That’s how they make their money. So if you’re interested in becoming a franchise broker, you can count on a pretty good income.  It’s important for the broker to provide true professional value and insights to the prospective franchisee.  That information is hard to learn and when you use a GOOD franchise broker the fee they earn is well worth it in the value you receive. 

What Franchise Brokers Need 

Interested in pursuing a career as a franchise broker? Then you need to know what is required of you! As a general rule of thumb, there are no licenses or certifications necessary to become a franchise broker except for two states, NY and WA. These states simply require a registration fee, not a license, and it’s easy to get started just as you are. There are certain qualifications from the Franchise Brokers Association, however, which prohibit individuals who lack the professional knowledge and skills from becoming a broker. While the licensure is low, in order to be successful, you need to be comfortable working with, talking to and leading high net worth prospective franchisees

The lack of licensing might sound like a good thing to any potential franchise broker, but the fact of the matter is that a lack of certification and licenses gives rise to many untrained franchise brokers who have the power to topple the business dreams of many prospective franchisees.

That isn’t who you want to be.

Since franchise brokers are paid by franchisors once a prospective franchisee agrees to buy their franchise, sometimes these franchise brokers have taken to completely forfeiting the interests of the franchisee. Not only does this result in the franchisee sustaining huge financial losses and a multitude of other problems, but it also has the potential to tarnish the reputation of franchise brokers who are doing their work honestly.

As a franchise broker, you want to build a positive reputation and be known for successfully helping others get into a business they love. This way, everyone succeeds. 

Franchise Broker Training: Set Yourself up for Success!

Despite the lenient licensing situation, there are still plenty of trustworthy franchise brokers out there, including our team of fully trained franchise brokers. If you want to learn more about how you can become a successful franchise broker, check out our training or get in touch with our team today.


Download “5 Red Flags to Look for When Selecting a Franchise”