Franchising Done Right: What We've Learned Over 40+ Years
“Every franchisor gets the franchisees they deserve!”
Franchising, the most dynamic business model of the 20th century, is even more relevant today in our globalised 21st century.
While the internet has broadened horizons for all businesses, franchising offers something unique: a local owner-operator presence that complements web-based marketing and delivery. Physical locations remain critical for connecting with local customers.
Take Google, for example. Despite being the world’s most powerful internet corporation, it operates over 70 offices globally. While not franchised, these offices highlight an important truth: being close to your customers helps build trust, promote the brand, and educate current and future consumers.
Franchise owner-operators create personalised relationships with their communities, fostering trust in an increasingly cynical business environment. Entrepreneurial franchisees also drive goodwill, build brand authority, and enhance enterprise value. This, in turn, attracts better franchisees and motivates existing ones to expand, creating a cycle of growth and success.
However, success doesn’t come automatically.
Success Starts with the Franchisee
Good franchisees know that a franchisor provides the business model, system, and brand—but it’s up to them to succeed. That’s why some franchisees thrive while others fail within the same network.
Franchising will continue to thrive in this century, but only if franchisors focus on building serious enterprise value. I have learned that many would-be franchisors lack the necessary preparation. Over 30 years, only a small number of Australian franchisors have built networks valued at over $10 million.
Why Do Many Franchise Systems Fall Short?
Most franchise systems weren’t originally set up for franchising, and many still aren't fully equipped for it. Too often, franchises are sold on dreams rather than grounded in solid foundations. This leads to mediocrity and wasted potential for both franchisors and franchisees.
Yet, well-developed franchise networks can generate generational wealth. These networks start with proven, profitable businesses that have operated successfully for at least 2–3 years, often with multiple units under management.
Understanding how prospective franchisees evaluate opportunities is crucial. Franchisors must attract, screen, and select the best candidates—granting, not selling, franchises. Remember Young’s First Law: “Every franchisor gets the franchisees they deserve!” Prospective franchisees, in turn, must commit to compliance, maintaining brand standards, and working hard, particularly in the early years.
Passion, Vision, and Responsibility
Building a successful franchise requires passion, vision, and a genuine appetite for the journey—even through the tough times. It also demands a commitment to social and ethical responsibility. Franchisors have obligations to their franchisees, and franchisees to their franchisors, but both must prioritise their customers, suppliers, and employees.
– Rod Young
About Rod Young
Rod Young is considered one of the world’s leading franchise consultants.
He is the founder and Chairman of DC Strategy, Australasia’s premier franchise advisory group.
He is also the Executive Chairman and Global CEO of Cartridge World, the 60 country, 1400 store global printer, cartridge and printing supplies network, and sits on the board of several leading and emerging domestic and international franchise networks.
DC Strategy develops franchise networks and brands, providing franchise consulting and legal advice, branding, marketing and online presence, franchisee recruitment and international strategy.