Franchisor: have you also considered your own locations?

With the growth of the number of franchise formulas, the number of franchise organizations that work exclusively with franchisees from the start is also increasing. There can be good reasons to work solely with franchise locations. However, we have the impression that too few franchise formulas seriously consider the option of having both company-owned and franchise locations.

Of course, the advantages of franchise locations also serve as reasons to limit the number of company-owned locations. For instance, there must be additional investment in properties and personnel. This leads many managers to say, "we focus everything on franchising." Rightfully so, franchising sometimes simply requires full attention. However, especially recently, the arguments for operating a certain number of company-owned locations alongside franchise locations have been gaining considerable ground.

Franchise formulas more frequently and quickly have to adjust their formula to new market conditions. This again requires investments from the associated entrepreneurs. It certainly helps if, as a franchisor, you can demonstrate that investing money in things like local promotion, store appearance, or the use of smart store automation indeed yields results. The company-owned locations act as an ideal testing ground for experimenting with new developments.

Additionally, it is beneficial for the relationship between franchisor and franchisee if the franchisor also operates locations themselves. This fosters the franchisee’s confidence in the franchisor’s knowledge and expertise. It also gives the entrepreneur further assurance that the franchisor can empathize with the daily practice.

Finally, having some company-owned locations offers an extra piece of security and insight for parties that want to acquire a formula organization or when the organization is seeking additional financing. Not unhelpful, considering the many acquisitions and capital injections we have witnessed in recent years and expect to see again in the coming years.