In franchising, some brands accelerate rapidly while others barely move. The natural question: why does one franchise catch fire while another, nearly identical concept stalls? Entrepreneur magazine recently profiled five fast-growing franchises—Zoom Room, Superior Fence & Rail, Mister Sparky, One Hour Heating & Air Conditioning, and Benjamin Franklin Plumbing.
Investing in a franchise provides a structured business model, market-tested products, and ongoing support from franchisors, making it an appealing option for potential business owners.
As a CFO to franchisors, I wanted to take a financial strategist’s look at what these systems are doing right—and how emerging brands can apply similar playbooks without breaking the bank. Successful franchises have developed over time by applying strategic financial and operational models.
Understanding the Franchise Landscape
Franchising continues to be one of the most attractive ways to start a business. With output projected to exceed $800 billion and more than 8 million people employed across the industry, franchising represents a sizable slice of the U.S. economy. Sectors from food service to home improvement all operate under the franchise model.
Why? Because it offers the perfect mix of entrepreneurship and structure. A franchisee gets the support of an existing brand and systems—while still owning and running their business. Franchisees are granted the right to sell products or services under the franchisor’s brand name. That mix is also what makes the industry so resilient. In tough times, franchise systems often outperform startups thanks to proven models and brand equity.
Understanding the contract involved in franchising is crucial, including the financial obligations and compliance requirements. This ensures that potential franchisees are fully aware of the terms and responsibilities before entering into agreements.
It is also essential to evaluate various franchise opportunities to ensure a thorough understanding of their financial and operational aspects. Conducting due diligence and possibly seeking professional assistance can effectively assess the value and potential of these investments.
Introduction to Business Format Franchising
Business format franchising is a widely adopted franchise business model where a franchisor grants a franchisee the right to operate a business using their established system, trademark, and products or services. This model is prevalent across various industries, including retail, food service, and healthcare, due to its structured approach and proven success. According to the International Franchise Association (IFA), business format franchising constitutes the majority of franchise businesses in the United States.
For prospective franchisees, evaluating a franchise investment involves several critical considerations. The franchise agreement outlines the terms and conditions of the partnership, including the initial franchise fee and ongoing franchise fees. These fees are essential to understand as they impact the overall investment and operational costs. Additionally, reviewing the Uniform Franchise Offering Circular (UFOC) is crucial. This document provides detailed information about the franchise system, helping prospective franchisees make informed decisions.
By leveraging the established business format franchising model, franchisees can benefit from a proven system, brand recognition, and ongoing support, making it a compelling option for those looking to own and operate their own business.
The Market Is Expanding—Fast
Franchising is not slowing down. In 2024, over 15,000 new units are projected to open, pushing the U.S. total past 820,000. While overall industry growth sits at 1.9%, early-stage brands often grow much faster as they attract the first wave of franchisees. For these companies, understanding what drives successful expansion is critical. Developing strong franchise programs and relationships is essential to support this growth.
I’ve spent time analyzing the financial infrastructure and business decisions behind five high-performing brands—and the patterns are clear.
Laying the Groundwork for Scalable Success
Emerging franchisors need more than a great product—they need a replicable model. A well-structured franchise development program sets the tone. That includes creating strong ops systems, clear franchise documents, and smart marketing plans. Conducting thorough research is crucial to understand the financial aspects and the overall market landscape, which helps in making informed decisions.
But support doesn’t stop there. Robust onboarding and training are key. Franchisees must understand not only how to run the business but how to deliver on the brand’s promise. From initial training to ongoing coaching, brands that invest in education tend to outperform those that don’t. Additionally, understanding the money required for initial investment and ongoing operations is essential for sustainable growth.
Transparency and consistency, built into everything from FDDs to site selection tools, create the infrastructure required for smart growth. The financial commitments involved in purchasing a franchise, including the benefits of proven success models, are significant factors that contribute to the overall success of the franchise system.
Evaluating an Existing Business for Franchising
Evaluating an existing business for franchising potential requires a thorough assessment of its ability to expand and replicate successfully. The Federal Trade Commission (FTC) provides guidelines that franchisors must follow to disclose essential information to prospective franchisees. This transparency is vital for making informed decisions.
When evaluating an existing business, several factors come into play. Start-up costs are a primary consideration, as they determine the initial investment required. Understanding franchise law is also crucial, as it governs the relationship between franchisors and franchisees. Additionally, assessing the business’s potential for growth is essential to ensure long-term success.
A comprehensive analysis of the business’s financial performance, marketing plan, and operations is necessary to determine its franchisability. Resources like the Franchise Business Review can offer valuable insights into the performance of existing franchise businesses. Exploring the business’s products and services, target market, and competition will help gauge its potential for success as a franchise.
By conducting a detailed evaluation, prospective franchisors can identify whether an existing business is suitable for franchising and develop a strategy for successful expansion.
4 Essential Growth Drivers for Franchisors
1. Scalable, Tested Business Models
The most successful franchise systems are built on business models that work in different markets—not just one lucky location. Their processes, staffing plans, and unit economics are refined and repeatable.
Take Superior Fence & Rail, for example. Their revenue grew from $17M in 2019 to nearly $190M in 2023. That kind of leap doesn’t happen by accident. They’ve clearly dialed in a model that works and can be rolled out again and again.
📌 Bonus Tip: If you’re unsure whether your model is scalable, start tracking your sales KPIs and compare performance by location or region.
2. Required, Enforced Local Marketing
Most franchise agreements include minimum marketing spend requirements, yet few franchisors enforce them. This is a mistake.
One Hour Heating & Air Conditioning requires 8–12% of gross revenue to go toward local marketing. This keeps leads flowing and brand presence strong in every territory.
Brands that support franchisees with launch marketing, lead generation plans, and advertising assets give each new location a better shot at success. And when marketing spend is treated as optional? Results become wildly inconsistent.
3. Strong Financial Performance at the Unit Level
Franchisees want to see a clear path to profitability. That starts with strong unit economics—reasonable startup costs and high potential returns.
Let’s return to Superior Fence & Rail:
- Top-third locations generate over $5M annually
- Bottom-third still pull in over $1.1M
- Startup investment ranges from $130K to $207K
That kind of ROI is attractive. Add in recurring revenue potential from repairs and maintenance, and it’s easy to see why they’re scaling quickly.
Zoom Room offers a similar story: high retention, exceptional NPS, and customers who spend significantly more over time. Emerging brands that offer a subscription model or recurring revenue stream are positioned to grow more predictably and profitably.
4. Access to Capital and Financing Tools
It takes capital to scale. Emerging brands often stall due to underfunding—not because the model is flawed.
Brands like Benjamin Franklin Plumbing offer flexible financing:
- Up to 75% of the initial fee can be financed over three years
- Conversion incentives reward independent businesses that join the system
- Multi-unit discounts reduce fees for expanding franchisees
These tools remove financial friction and encourage growth. When combined with good training and ops support, they can accelerate expansion significantly.
Converting Leads Into Franchise Sales
Having a great system isn’t enough—you need to attract the right owners. Potential franchisees should explore various franchise opportunities and resources to make informed decisions.
That means building a solid franchise sales process with lead nurturing, SEO-optimized content, and value-driven discovery calls. For those interested in entering the franchise market, it is crucial to understand the implications of franchising. Highlighting success stories and unit economics builds credibility and creates urgency.
And once franchisees are in? The relationship matters. Regular check-ins, shared KPIs, and open communication turn new owners into long-term brand advocates who drive referrals and build momentum.
Choosing the Right Franchise
Choosing the right franchise is a critical decision that requires careful consideration of several key points. Prospective franchisees should start by researching the franchise business model and the franchisor’s reputation. The International Franchise Association (IFA) offers resources and support to help in this process.
Brand recognition and marketing plans are significant factors to consider. A franchise with strong brand recognition can attract customers more easily, while effective marketing plans ensure sustained growth. Evaluating the franchisor’s support system is also crucial. The best franchises provide comprehensive training and ongoing support to help franchisees achieve their goals.
Financial performance is another essential aspect. Prospective franchisees should assess the initial investment, ongoing fees, and potential returns. It’s important to find a franchise that aligns with personal interests, skills, and financial resources to ensure long-term satisfaction and success.
By thoroughly researching and evaluating these factors, prospective franchisees can choose the right franchise that offers the best opportunities for growth and success.
Why Franchising Still Wins During Economic Uncertainty
Franchising offers unique advantages in tough times:
- Leverage without high risk: Scale with local owners rather than corporate capital.
- Tech-driven efficiency: Tools like centralized dashboards and automated marketing make each location smarter and leaner.
- Built-in feedback loop: Franchisees provide market insights in real time, enabling faster adaptation.
However, it’s important to consider the risks associated with franchising, such as high startup and ongoing royalty costs. Franchisees may face financial pitfalls from misleading information, a lack of operational control, and difficulties in securing financing, which can significantly impact their success.
Most importantly, franchisees have skin in the game. That mutual investment drives better decisions and keeps everyone aligned.
What Zoom Room Teaches About Niches
Zoom Room shows how powerful it can be to own a narrow, profitable niche. Instead of offering every pet service, they specialize in dog training. This focus builds pricing power and customer loyalty. As a business owner, managing the franchise involves adhering to brand guidelines and ensuring consistent service quality.
- High margins from limited overhead
- Recurring revenue from memberships
- Loyal customer base willing to pay premium rates
The takeaway? Emerging brands should look for niche segments with high lifetime value and low operational complexity.
Private Equity and Shared Infrastructure: A New Growth Model
Authority Brands, which owns several of the brands mentioned above, gives its franchisees access to shared resources—from tech to marketing to supply chain. These economies of scale allow faster expansion, especially via conversion programs. The company plays a crucial role in facilitating franchise success and growth by providing these shared resources.
Even if private equity isn’t on your radar, strategic partnerships and vendor alignment can offer similar leverage.
Coaching, Compliance, and Long-Term Support
Great franchisors don’t just launch locations—they help owners thrive long-term.
That includes:
- Operations manuals and real-time coaching
- Compliance assistance for federal and state regulations
- Franchisee performance reviews and leadership training
- Providing necessary equipment and training for franchisees to operate their businesses effectively
This infrastructure ensures alignment, minimizes risk, and creates a culture of continuous improvement.
Managing Franchise Operations
Managing franchise operations effectively requires a deep understanding of the franchise business model and the ability to execute the franchisor’s system. Franchisees must adhere to the franchise agreement, which outlines the standards and procedures for operating the business.
Key operational aspects include site selection, marketing, and customer service. Franchisors typically provide training and support to help franchisees develop the necessary skills and knowledge. This support ensures consistency and quality across all locations, which is vital for maintaining the brand’s reputation.
Effective management also involves ongoing communication and collaboration between the franchisor and franchisee. Regular check-ins, performance reviews, and leadership training help franchisees stay aligned with the franchisor’s expectations and achieve long-term success.
By focusing on these operational elements and leveraging the support provided by the franchisor, franchisees can manage their business successfully and contribute to the overall growth of the franchise system.
Final Thoughts: Strategic Growth Is Intentional
Brands that scale effectively don’t leave growth to chance. They:
✅ Enforce consistent marketing ✅ Focus on unit profitability ✅ Provide capital solutions ✅ Build systems that are easy to replicate
A critical component of franchising is the exchange involved, where the franchisee agrees to pay an initial fee and ongoing royalties to the franchisor. This exchange illustrates the mutual obligations and benefits for both parties.
If you’re an emerging franchisor, you don’t need to copy every playbook—just the right pieces. Start with strong data, clear processes, and a commitment to supporting your owners. From there, scaling becomes a matter of discipline, not luck.
Need a Financial Partner to Help You Grow?
At Krieger Analytics, we help franchisors build smart, scalable systems backed by financial clarity. Whether you’re preparing to launch or managing 30 units, our team can help you create the strategy and infrastructure to grow with confidence. Investing in franchises offers the potential for financial returns and market recognition, supported by established business formulas and proven concepts.
👉 Book a free consultation today — let’s talk about where your franchise can go next.
