How Do Franchise Consultants Get Paid?

Who pays a franchise consultant

The franchisor pays. When a consultant introduces you to a brand and you sign that brand’s franchise agreement, the franchisor pays the consultant, or the network the consultant belongs to, a placement fee. If you never buy, the consultant usually earns nothing.

The FTC describes the model from the regulator’s side. Its consumer guide to buying a franchise says franchise brokers “often work for franchisors, and are paid only if a sale is made.” The same guide notes that brokers may call themselves business coaches, advisors, referral sources or sales consultants, so the job title tells you little about the pay model.

The largest networks say the same thing on their own sites:

• FranNet says in its FAQ that working with FranNet is “absolutely free” and that it receives its broker fee “directly from the franchise that you may buy.”
• The Entrepreneur’s Source says in its FAQ that its coaches “get paid in referral fees” from business and financial partners “if and when you choose to work with those partners.”
• FranChoice describes its service as complimentary, and its consultation form states that buyers will not be asked to pay anything for its services.

How big is the placement fee?

There is no single published rate. Each franchisor sets the fee in a private contract with the consultant or network, so the exact amount on any given deal is rarely public. Here is what public sources do say:

• A share of the initial franchise fee. Franchise Business Review reported in January 2026 that broker commissions are typically paid as a percentage of the initial franchise fee, sometimes up to 50% of an initial fee that could range from $30,000 to $50,000.
• A flat fee. The same Franchise Business Review article says some brokers are paid a flat rate instead. The FTC guide also says some brokers earn a flat fee regardless of price, while others earn a commission based on the cost of the franchise.
• What networks tell new brokers. The Franchise Brokers Association’s recruiting page for prospective brokers lists “50% of franchise fee” as a headline figure.
• Multi-unit deals. Franchise Business Review notes that many franchisors use brokers to sell multi-unit agreements of up to three to five units, which generally means a larger payout to the broker.

Does the fee raise your price? The FTC Franchise Rule requires Item 5 of the Franchise Disclosure Document (FDD) to state the initial fees and, if they are not uniform, the range or formula used, according to 16 CFR 436.5. FranNet says the price does not change whether or not a consultant is involved. Franchise Business Review CEO Eric Stites told that publication that some franchise companies have raised their fees because they work with brokers and have to pay them more to stay competitive. Read Item 5 yourself and ask the franchisor whether any fee is negotiable.

Who pays whom: the money map

Four parties are involved in a consultant-assisted franchise purchase. Only one of them, the buyer, pays nothing to the consultant.

Source: FTC, A Consumer’s Guide to Buying a Franchise; FTC Franchise Rule, 16 CFR 436.5; FranNet FAQ; IFPG; The Entrepreneur’s Source FAQ; all accessed October 2026.

How consultant networks work and how members pay

Most consultants belong to a network that gives them training, a portfolio of franchisor relationships and back-office support. In return, consultants pay the network in some form. The structure differs by network, and only some publish their terms:

• IFPG. Its recruiting page tells new consultants they will receive “a healthy commission paid by the franchisor,” that the training program lasts about 4 to 6 weeks, and that apart from upfront tuition there are no required ongoing fees. It does not state the tuition amount on that page.
• The Entrepreneur’s Source. Its FAQ describes the company as “a regulated career ownership coaching franchise” whose coaches are independent owners. Because it is sold as a franchise, anyone buying in receives an FDD that lists what they pay.
• FranNet. Its FAQ says the broker fee comes from the franchise the buyer purchases. FranNet consultants work as local broker consultancies under the FranNet name.
• Franchise Brokers Association (FBA). Its broker page describes training and vetted brand partnerships but does not publish membership prices.
• FranChoice. Its site invites consultants to join its consultant network and franchisors to join its portfolio of franchisors.

Why this matters to you: a network’s portfolio is the menu your consultant orders from. Two consultants in different networks can show you different brands for the same budget, which is one reason to talk to more than one. Our guide to the best franchise consultants explains how the main networks differ.

What the pay model means for objectivity

Being paid by the franchisor does not make a consultant dishonest, but it limits and tilts what you see. Know the four pressure points before your first call.

A limited menu

A consultant presents the franchisors that pay them. Brands that recruit only through their own development teams, or that do not work with your consultant’s network, will not appear on your shortlist. The FTC guide puts it directly: “Ask how many franchisors the broker represents. A broker who represents only a few franchisors will give you limited suggestions.”

Quality screening varies

The FTC warns that “some brokers represent any franchisor willing to pay them a commission for a sale,” and suggests asking to see the broker’s selection criteria and how many franchisors they recently turned down.

A pull toward a signed deal

A consultant paid only when you sign has a reason to keep you moving. A good one will still tell you to walk away from a poor fit. Watch for urgency that does not come from you.

A pull toward bigger or newer deals

When the fee is a commission based on the cost of the franchise, the FTC says the broker may steer you toward a more costly franchise. Franchise Business Review adds that brokers may favor emerging brands or push multi-unit deals to increase commissions.

Federal and state rules for franchise brokers

Franchise brokers are covered by the federal FTC Franchise Rule, and a few states also make them register. Here is what the rules say, in the regulators’ own terms.

The federal rule

• The FTC Franchise Rule defines a “franchise seller” to include “third-party brokers who are involved in franchise sales activities,” according to 16 CFR 436.1.
• The Item 23 receipt page of the FDD must list the name, principal business address and telephone number of each franchise seller offering the franchise, under 16 CFR 436.5(w). Your consultant’s name should appear on the receipt you sign.
• FDD Item 2 covers the franchisor’s directors, officers and others with management responsibility for franchise sales, and the Item 3 litigation history covers those same people, under 16 CFR 436.5(b) and (c). Do not assume an outside consultant’s background appears there.
• The franchisor must give you the FDD at least 14 calendar days before you sign a binding agreement or pay any money, under 16 CFR 436.2(a).

State broker registration

Source: New York Attorney General, Form I Franchise Broker Registration Form, 2024; Washington DFI, Franchises FAQs; California DFPI, Franchise Brokers FAQ, updated May 2026.

How to ask a consultant about pay

Ask directly, on the first call. A consultant who is comfortable with their model will answer every one of these without hesitation:

1. Who pays you, and at what point in the process?
2. Is your fee a percentage of the franchise fee or a flat amount, and does it differ between the brands you are showing me?
3. How many franchisors do you represent, and how do you choose them?
4. Do you earn more if I buy several units instead of one?
5. Does anyone else pay you if I use them, such as a lender, funding company or other partner?
6. Are you registered as a franchise broker in my state, where that is required?
7. Will your name appear on the Item 23 receipt of each FDD you send me?
8. If the right brand for me is outside your network, will you tell me?

Write the answers down and compare them across consultants. If you are still deciding whether to use one at all, read are franchise consultants worth it. If budget is your main filter, start with our list of franchises under $100k.

How this site gets paid