The Riskiest People In Franchising

You want to buy a franchise, but you don’t know which one. A booming industry of franchise brokers are profiting from just that problem—but if you’re not careful, they could deal you even more trouble.

- Jason Daley

Lisa Tubbs spent 20 years in the corporate world as a successful project manager, then finally succumbed to the itch to run her own business. She wanted to follow in the footsteps of her father, a commercial fisherman, and her grandfather, a plumber. So in 2016, she took a buyout at her job and then met with a career transition adviser to explore her options. His verdict was that she had an entrepreneurial spirit but maybe not the confidence to go it alone. Franchising was just the thing for her.

Which franchise should she buy? Tubbs was eager to find the answer. She read up on the industry and visited the International Franchise Expo in New York City. But like many potential franchisees, she was overwhelmed by the sheer number of brands and their jargon-heavy pitches. So she asked her career adviser for help, and he told her to contact a franchise broker.

It was a decision that could have made her career—or ruined it.

Franchise brokers are a relatively new entity in the world of franchising. They’re a form of middlemen: They help a potential franchisee narrow down their choices to a few brands that fit their particular skill set and budget, and then look into the finances and track records of those brands to make sure they’re worth considering as an investment. In exchange for connecting a franchise with a new buyer, the broker scores a commission from the franchisor.