For years, an overlooked issue has been quietly undermining the financial health and long-term stability of franchise brands: the excessive reliance on third-party brokers and franchise sales organizations. What began as a perceived shortcut to accelerate growth has evolved into a costly and unsustainable dependency that strips brands of profitability and control.

Franchisors now routinely surrender 45 to 75 percent of their franchise and development fees in commissions — often in exchange for little more than a lightly qualified lead. Despite these fees, the burden of nurturing, educating, and closing the sale frequently still falls on the franchisor’s internal team. The value proposition, in most cases, simply does not add up.

Beyond commissions, franchisors are subjected to mounting costs for expos, “network access” fees, and recurring monthly dues. When these expenses are multiplied across several broker groups, the financial strain becomes inescapable. However, the implications go beyond economics.

Poorly vetted candidates, attracted by polished marketing rather than genuine brand alignment, often progress through the system unchecked. The result: increased franchisee dissatisfaction, compliance issues, operational breakdowns, and costly turnover. Brand equity is quietly eroded, while the appearance of growth masks deeper vulnerabilities.

These practices raise a critical question for the franchising community: Are systems being built for sustainable, long-term success or is growth being purchased at the expense of brand health and franchisee outcomes?

In today’s landscape, the concept of responsible franchising is no longer optional — it is essential. As such, a reassessment of franchise sales models is overdue. The current structure, in many cases, rewards volume over value, hype over fit, and speed over sustainability.

A more viable path forward is both possible and necessary.

Under a modernized model, franchisors would maintain ownership of the development process while leveraging support systems designed for alignment, not volume. This could begin with a modest one-time onboarding fee, used not as a pay-to-play entry point, but as an opportunity to define brand criteria, cultural fit, operational expectations, and candidate profiles.

Referral fees would be paid only upon the formal awarding of a franchise and the receipt of development fees, replacing high commissions just for introductions with performance-based fees that reflect the nature of a true referral. Interested parties would be drawn in not through aggressive sales tactics, but through access to valuable information and resources — essential components of the due diligence process required before even considering franchising as a path to business ownership.

Most importantly, candidate vetting would be performed by experienced franchise professionals — individuals equipped to evaluate not only financial qualifications but also alignment with operational models, values, and long-term potential. Monthly strategic review meetings between franchisors and development partners would ensure consistent alignment and transparent collaboration.

This model accomplishes three essential goals:

It restores financial discipline by eliminating wasteful spending on unproductive leads, inflated commissions, and ineffective events.

It enhances franchisee selection, reducing the likelihood of mismatched candidates and the risks they pose to operational performance and brand cohesion.

It returns control to franchisors, allowing them to protect their brand, culture, and long-term viability.

Responsible franchising starts at the very first touchpoint: the sales process. When that process is driven by trust, transparency, high-quality resources, and qualified matchmaking — rather than access fees and mass-market hype — stronger foundations are built. Foundations capable of supporting scalable, healthy growth.

Brands must now ask themselves a defining question: Who truly represents the brand — internal leadership or outsourced brokers with no accountability for long-term outcomes?

Franchising’s future depends on reclaiming control of the development journey. With practical structure, clear expectations, and a renewed focus on quality over quantity, franchise growth can be both profitable and principled.

The time for change is not next quarter, or next year. The time is now.

Franchisors committed to responsible growth must rethink their sales strategies, prioritize long-term brand health over short-term gains, and reclaim control of the development process. Care to explore how this can work for your brand? Reach out to the author below — it all starts with a conversation.

Make today a great day. make it happen. Make it count!

Responsible Franchising: A Gradual Journey, Not a Sharp Turn

Franchisors: Don’t Stick Your Head in the Sand—This Is the Moment to Lead

A Cautionary Tale for Emerging Franchise Brands: Beware the Cracked Cup

About the Author

With over 40 years of experience as a senior executive, consultant, coach, and entrepreneur, Paul Segreto is a recognized leader in small business, franchise, and restaurant management and development. His mission is to drive success through a culture-to-growth philosophy while connecting the right people, brands, and opportunities.

Since 2001, Paul has advised startups and emerging brands in defining their competitive edge and scaling effectively. He also provides coaching to individuals, families, and partners pursuing entrepreneurial goals.

Recognized as a Top 100 Global Franchise and Small Business Influencer, Paul shares daily insights at Acceler8Success Cafe and regularly contributes to a variety of industry blogs and publications.

Reach out directly to Paul at paul@acceler8success.com—your path to success may be one conversation away.

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At Acceler8Success Group, we are committed to helping entrepreneurs, founders, restaurateurs, franchise operators, and business owners defy the odds. Our work begins where passion meets reality—bridging vision with execution, and ambition with strategic discipline.

Through coaching, advisory, digital media, marketing solutions, franchise development, and business optimization strategies, we deliver tailored support designed to not just launch businesses but to scale them sustainably. We help uncover blind spots, optimize strengths, and build the operational and strategic foundation necessary for long-term success.

If you are building something bold—or struggling to hold together what you’ve built—we invite you to connect. Let’s ensure your brand becomes the exception to grim statistics, not the example of them.

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