Exploring the Use of Franchise Brokers

Franchise Update Media has 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 number 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 is a valuable resource that can provide crucial insights on 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 annual 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 2025 AFDR.

The in-depth report features results from more than 110 organizations actively expanding their franchise systems. The thoroughly researched report spotlights the latest trends and reveals various franchise lead-generation and sales trends. The AFDR represents companies totaling more than 50,000 franchise units and 42 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.

Use of franchise brokers

The AFDR again examined the role of brokers in franchise recruitment, including how many survey participants use brokers, how much they spend, and the results they have seen.

Nearly half of the franchises surveyed (44 percent) last year said they used brokers in their recruitment process. Seventy-seven percent of the respondents said a lead from a franchise broker resulted in a sale over the past 12 months. Moving forward, a greater number of franchises (56 percent) expected to use brokers in 2025.

The costs

We all know that working with a broker comes at a considerable price. Therefore, it should come as no surprise that 96 percent of the respondents who used brokers said the average cost per unit/signing was higher than other lead sources.

The report delved into the specific costs of working with franchise brokers and came up with the following numbers:

Average cost per broker lead: $212

Average cost per broker sale: $48,903

Average broker success fee: $34,095

Average broker spend: $78,700

Survey respondents anticipated that the average broker costs in 2025 will more than double to $157,741. This amount includes broker membership fees, marketing fees to drive leads to brokers, and broker conference fees with travel/hotel expenses.

For more information about the 2025 AFDR and how you can purchase the report, please scan the QR code below or click afdr/franchiseupdate.com.