+65 9144 1412 [email protected]

FSOs vs Brokers

It’s Not Another Lead Referral Network

Many people confuse Franchise/License Sales Outsource (FSO/LSO) companies with Broker networks, but in fact, they are two different types of organizations entirely.

Brokers are, in a legal sense, often referred to as Lead Referral Networks (LRNs). (For the sake of clarity, we refer to broker networks as LRNs and the individuals within those networks as brokers.)

The primary role of LRNs is to provide pre-qualified leads to participating franchisors/licensors in return for a success fee.

The primary role of FSO/LSO is to become the sales arm of your franchisor/licensor entity.

A comparative chart:

Core Activity Broker Firm FSO/LSO Firm
Primary Function Provide qualified leads Take leads through the sales process until a sale is closed
Number of Concepts Represented 20 – 200 or more Generally, under 20 depending on the size of the firm
Number of Concepts an Individual Broker or Salesperson Would Actively Promote 25 to 200 1 to 4
Reporting Obligations None Monthly
Contractual Obligations None Negotiated levels of annual sales specified in the contract
Required Marketing None, although they may ask Negotiated levels of marketing expenditure by the client included in most contracts
Fees Success Fees only, range of 25%-50% Monthly Retainer plus Success Fee
Responsible For Sending Initial Materials Broker FSO/LSO
Responsible For Pre-Qualification Broker FSO/LSO
Responsible For CRM Data Entry Franchisor/Licensor FSO/LSO
Responsible For Follow-Up Franchisor/Licensor FSO/LSO
Responsible For Discovery Day Franchisor/Licensor FSO/LSO
Responsible For Legal Disclosure (FDD) Franchisor/Licensor FSO/LSO
Responsible for Document Management Franchisor/Licensor FSO/LSO
Responsible for the Final Qualification and the Actual Decision on the Award of a Franchise Franchisor/Licensor Franchisor/Licensor

 

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When considering a Franchise/License Sales Outsource company, here are examples of important criteria they should meet:

    • Provides full-cycle services
    • Staff with substantial franchise/license sales experience
    • Commitment to your development goals

Our model offers substantially less risk and significantly improved chances of return at a cost that is similar to what a franchisor/licensor would pay for alternatives.

 

Click here to view on the next Blue Seas FSO/LSO Service: Quality Control

Time is Money. Ready To Franchise Now?

 

Phone: +65 9144 1412

Email: [email protected]

Address: 1 Tampines North Drive 1, #06-08 T-SPACE, Singapore 528559

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