How Much Can a Franchise Broker Make?
When answering the question, "how much can a franchise
broker make" there are many factors to take into consideration.
Some brokers work on a part time basis simply as a part time
venture
or bundled with another business while other brokers take a
very aggressive full time approach. Just like most things in
life you get out what you put in in terms of effort, marketing
and more. Lastly, some brokers are simply better at this business
than others and ultimately are more productive and successful.
That being said it's a valid question so here are some general
rules of thumb as to how
much franchise brokers make.
Typically there are anywhere from 25,000 - 35,000 new franchise
units sold each year in the US. (Brokers also work international
deals). Of these franchises sold about 25% of them are handled
by franchise brokers. There are currently about 1,000 active
franchise brokers in the US. The average fee for a franchise
placement for a broker is about $15,000. So assuming all franchise
brokers are created equally (which they are not) that's 5,000
- 8,700 deals handled by brokers each year, or roughly 5-12
deals per year per broker. Based on the average commission
that's $75,000 - $150,000 per year per broker. Before you
get too excited it's important to look at the reality of the
business.
Not all franchise brokers are created equally. Just like
any other industry some completely fail, some are elite top
producers and some are simply content doing a few deals a
year and enjoy the part time income. It's completely up to
the broker as to how focused they are on their business. Some
"brokers" enter this business and struggle to make
a single franchise placement. The industry was just not the
right fit despite what they initially believed. Other brokers
enjoy making a handful of franchise placements each year and
enjoy a comfortable income while enjoying an great lifestyle
business and ofcourse there are the brokers who have taken
to the business like a fish to water, stayed very focused
and determined and enjoyed multiple six-figure incomes year
after year.
When researching this industry it is critical to get a sense
of not only the initial training offering by the various firms
but the tools and ongoing support provided as well. Often it's
this back office support that makes the difference in a new
broker's success.
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