If you are exploring franchise opportunities in the UK, you may come across franchise brokers. These professionals help connect potential franchisees with suitable franchise brands. One of the most common questions people ask is how much a franchise broker charges. The answer depends on who they are working for and how their payment structure is arranged. Understanding this can help you make informed decisions during your franchise journey.

Who Pays the Franchise Broker?

In most cases in the UK, the franchise broker is paid by the franchisor, not the franchisee. This means that if you are a prospective franchisee, you typically do not pay the broker directly for their services.

Instead, the franchisor agrees to pay the broker a commission if a franchise sale is successfully completed. This commission is usually built into the franchisor’s overall recruitment budget. As a result, candidates often benefit from the broker’s guidance without paying an additional upfront fee.

How Commission Structures Work

The most common payment structure for franchise brokers in the UK is a success-based commission. This means the broker is only paid if the candidate goes on to sign a franchise agreement and complete the purchase.

The commission is usually a percentage of the initial franchise fee. While the exact percentage can vary, it often ranges between 30 percent and 50 percent of the initial franchise fee. In some cases, a fixed referral fee may be agreed instead.

It is important to understand that this commission is paid by the franchisor, not added as an extra cost for the franchisee at the point of sale.

Do Franchisees Ever Pay Directly?

Although it is less common, some franchise consultants or advisers in the UK may charge candidates directly for more in-depth advisory services. This could include personalised business coaching, financial planning support, or detailed franchise research beyond simple introductions.

If a broker or consultant charges a direct fee, it should be clearly explained from the start. Transparency is important so that you understand what services are included and what you are paying for.

Most traditional franchise brokers, however, operate on a commission-only basis paid by the franchisor.

Why Franchisors Use Brokers

From the franchisor’s perspective, paying a broker can be a cost-effective way to attract suitable candidates. Recruitment can be time-consuming and expensive. Brokers can help pre-qualify candidates and introduce individuals who meet financial and experience criteria.

In the competitive UK franchise market, this can help franchisors grow more efficiently. The commission paid to a broker is often seen as part of the overall cost of recruiting a new franchisee.

Are There Hidden Costs?

A common concern among candidates is whether using a broker increases the price of the franchise. In most UK cases, the franchise fee is the same whether you are introduced directly or through a broker. The commission is part of the franchisor’s recruitment expense, not an extra charge added later.

However, it is always wise to ask questions and ensure you understand the full cost of the franchise investment, including legal fees, training costs, and working capital.

Conclusion

In the UK, franchise brokers are usually paid by the franchisor through a success-based commission, often calculated as a percentage of the initial franchise fee. Prospective franchisees typically do not pay brokers directly for introductions. While some consultants may charge for additional advisory services, transparency is key. Understanding how franchise brokers are paid can help you navigate the recruitment process with confidence and clarity as you explore your business ownership options.