Reality Check Report: Patrice & Associates — When Mentors Are Really Brokers

Franchising is often sold as a safe, proven path to business ownership and, for many, it is. But behind the sales pitch of some brands lies a complex ecosystem of incentives, hidden disclosures, and middlemen whose interests may not align with yours. Patrice & Associates, a recruiting franchise specializing in hospitality and executive search, offers a clear example of how slick sales tactics, selective disclosures, and broker conflicts can combine to leave franchisees stranded.

The Sales Funnel: Coaches or Brokers?

Many prospective franchisees first encounter Patrice & Associates through entrepreneurial “mentors” or “coaches” who present themselves as guides, offering free advice on choosing the right business. What most don’t realize is that these so-called mentors are often franchise brokers who only get paid when you sign. Their commissions are hefty, often $20,000–$30,000 per sale, and they are paid by the franchisor, typically out of the initial franchise fee you pay to the franchisor.

That creates an obvious conflict of interest: if a franchisor pays more for referrals, your “mentor” may push you harder in that direction. Whether or not the system performs well is secondary to their commission check.

This is exactly what happened in Patrice & Associates. What looked like unbiased advice turned out to be a sales job, with the “business coach” pocketing tens of thousands from the franchise fee once the deal closed.

What the FDD Hid…Until After the FRANCHISE Sale

The 2024 Franchise Disclosure Document (FDD) Patrice candidates relied on showed placement fee averages and medians (Item 19). But it omitted critical context: how many franchisees made no placements at all.

One month later, the 2025 FDD told a very different story:

• 189 total outlets in 2024

• 89 franchisees (47%) made zero placements; no income at all

• The remaining 100 franchisees averaged just $50,705 in gross placement fees each

• Before expenses, Patrice skimmed 24% right off the top for royalties, brand fund, database, and billing fees

Do the math: that left about $38,500 per year per “active” franchisee; before expenses, technology fees, or local marketing.

This reality is worlds away from the six-figure income promises or validation calls franchisees claim emphasized “18 placements a year.” According to the FDD itself, the average active owner made just five placements in 2024.

Fee Stacking and Control

Patrice & Associates operates with a centralized billing system. The franchisor collects client payments, deducts its percentage-based fees, and remits the balance weekly. Franchisees never control the cash before Patrice takes its share.

Add to this:

• Technology fees (currently $350/month, contractually up to $500/month)

• Resale program broker fees (10% of sale price or $31,000 + $3,000 marketing)

• Confidentiality and non-disparagement NDAs offered to struggling owners in exchange for temporary fee relief

The pattern is clear: revenue streams are structured to protect the franchisor, while risk piles up on the franchisee.

The “Exit” Mirage

When franchisees struggle, they’re sometimes told their outlet can be placed in a resale program and fees suspended, if they sign an NDA. What’s not disclosed? Few (if any) resales actually close. Who wants to buy a recruiting business with no placements, no assets, and no income?

This tactic may help the franchisor silence negative voices in the system, but it does little to create real exit opportunities for franchisees.

Why Did the 2024 and 2025 FDDs Look So Different?

One of the biggest questions raised is why the 2024 FDD painted a much rosier picture than the 2025 FDD issued just a month later.

• The 2024 FDD gave only averages and medians for placement fees. On the surface, those numbers suggested a workable business model.

• The 2025 FDD, however, included critical context: of 189 total outlets, 89 made zero placements in 2024. Nearly half the system earned nothing. The remaining 100 franchisees averaged only about five placements for the entire year, generating roughly $50,000 in gross fees before Patrice’s 24% cut.

So what changed? Franchisors must update their FDDs annually. Each update must include the most recent full year of system performance data. By the time the 2025 FDD was issued, Patrice & Associates had to incorporate new figures that painted a much bleaker reality than the snapshot disclosed in the 2024 version.

Teaching Moment: Always Ask for the Latest FDD

This illustrates a key due-diligence lesson: timing matters.

• Annual refresh: Every franchisor updates their FDD once a year. If you sign right before an update, you may be basing your decision on stale or incomplete numbers.

• Context matters: Averages without outlet counts and total placements can give the illusion of system health.

• Patience protects you: Waiting even a few weeks for the updated FDD could reveal critical realities. In Patrice’s case, that nearly half the system earned no income.

Takeaway: Don’t just read the FDD. Ask if a new one is about to be released and wait for it. That patience could save you tens of thousands of dollars and years of frustration.

Reality Check

When you combine:

• Selective disclosures (old FDD vs. new FDD),

• Broker commissions disguised as coaching, and

• Fee-heavy franchisor control,

you get a system where the deck is stacked from day one. Prospects think they’re buying into a high-income, work-from-home model. In reality, nearly half never make a single sale, and those who do earn far less than promised once Patrice takes its cut.

Key Takeaways for Prospective Franchisees

1. Always ask your “coach” how they get paid. If the answer isn’t transparent, assume they’re incentivized to sell, not to advise.

2. Compare FDDs over time. If the one you’re handed seems rosy, ask if a new version is coming. You can obtain previous versions of FDD’s from State franchise registration databases if the franchisor is registered in those states. California and Indiana are usually good places to start.

3. Scrutinize Item 19. Look for not just averages, but how many units earned nothing. High failure rates often hide behind selective disclosure.

4. Understand fee structures. If the franchisor takes money off the top, you’ll always be the last to get paid.

5. Don’t count on resale. Exit programs often serve franchisors more than franchisees.

👉 Franchise Reality Check™ Bottom Line: Patrice & Associates shows how franchisors, aided by brokers, can turn optimism into obligation. If your “mentor” profits when you sign, if your FDD leaves out the ugly half of the story, and if the franchisor controls your cash flow, you’re not buying a business. You’re buying risk.

The information analyzed in this article was provided to Franchise Reality Check™ by Patrice & Associates franchisees who requested confidentiality. Franchise Reality Check™ has not independently verified the franchisee’s correspondence or the franchisor’s Franchise Disclosure Documents with Patrice & Associates; all analysis is based solely on the materials supplied by the sources and the publicly available FDDs. The examples, interpretations, and calculations herein are offered for educational purposes only and should not be relied upon as legal, financial, or investment advice. Prospective or current franchisees are strongly encouraged to seek independent legal and financial counsel before making any business decisions in this or any other franchise.