How Franchises are Using Brokers

Franchise Update Media released its 2026 Annual Franchise Development Report.

We have been researching franchise lead generation and franchise recruitment processes for more than a decade. An annual in-depth online survey queries franchise development professionals about a variety of issues related to their lead generation and recruitment strategies. The results are presented each year in the Annual Franchise Development Report (AFDR). 

The AFDR report is a valuable resource that can provide crucial insights into franchise development, lead generation, and recruitment best practices. It’s the kind of information that can help brands assess what they are doing right and what needs improvement.

The project seeks to identify what’s new and innovative in franchise lead generation, recognize the methods and approaches yielding the best results, and gain insights into franchisors’ perspectives on current and future business performance.

Survey participants were franchisors who completed an in-depth questionnaire online. Responses were aggregated and analyzed to produce a detailed view into the recruitment and development practices, budgets, spending allocations, and strategies of a wide cross-section of franchisors. The data, along with accompanying commentary and analysis, provided the basis for the 2026 AFDR.

The in-depth report draws on insights from dozens of organizations that are actively expanding their franchise systems. Carefully researched and data-rich, it highlights the latest trends and sheds light on how brands are generating leads and closing franchise sales today. The AFDR reflects input from companies representing tens of thousands of franchise units across dozens of industry categories.

Franchise Update Media creates this report annually and shares its findings with franchise development teams to give them an edge in their lead generation and recruitment efforts.

Going for broke

Franchises are always searching for qualified leads, and many teams turn to brokers for help in finding candidates. Using brokers comes with an expense, however, and franchises must weigh the costs and benefits of using an outside service. The latest AFDR again explored how franchises use brokers and the success rate of doing so.

Here are some topline results from the survey about franchises’ use of brokers:

• Only 21 percent of franchises in the survey pay additional marketing fees to broker systems they work with.
• 12 percent pay a hire success fee to receive preferential treatment on leads.
• 76 percent say in the past 12 months that franchise broker applications have produced sales.
• 45 percent of the respondents say they track franchisee success rates of deals closed from broker leads.

In the survey, Franchise Update asked what broker metrics the franchises track. Starting with the general business category, the most popular response was lead-to-close ratio. Retail (non-food) and service (non-brick and mortar) each responded with 100 percent, and service (brick and mortar) franchises with 80 percent. All food franchises in the survey tracked applications to close.

Lead-to-close ratio was also popular when analyzed by franchise investment level. Two groups ($50,001 to $100,000 and $100,001 to $250,000) responded with 100 percent, while two others ($250,001 to $500,000 and $500,001 to $1 million) responded with 67 percent or more. Three other groups responded with more than 50 percent to Discovery Day close ratio.

The numbers were even more pronounced when looking at the question by number of units. The three groups all responded with 100 percent on lead-to-close ratio, and three other groups with at least 80 percent. Five groups responded with at least 50 percent to Discovery Day ratio, including 100 percent of franchises with 1,001 to 2,500 units.

We also asked franchises about the success rate of franchisees entering their system through broker leads. We received two dramatically different responses when analyzing based on business category. All retail (non-food) franchises said they had a higher success rate with franchisees brought into the system through brokers. On the opposite side, all service (brick-and-mortar) respondents with franchisees brought in through brokers had a lower success rate than non-broker franchisees.

When analyzing responses to that question based on investment level, all franchises in the $50,001 to $100,000 range said they had a higher success rate with franchisees who come in through broker leads. Half of respondents with investment levels between $100,001 and $250,000 had higher rates of success with franchises brought in through brokers, while the other groups did not see much of a difference.

Finally, the report also looked at responses based on franchise size. All respondents in two groups (less than 25 units, 1,001 to 2,500 units) said they experienced a lower success rate with franchisees entering the system through broker leads. Sixty percent of franchises with 251 to 500 units had more success with franchisees who came in through broker leads.

For more information about the 2026 AFDR and how you can purchase the report, please scan the QR code below or click Home | 2026 AFDR.