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An article by Michael Seid was recently posted at Franchise Chat, entitled "Developing A Proper Franchising Program". The article clearly indentifies some key issues as a company considers the advantages and disadvantages of franchising and includes a "franchisability" test as to whether a business is ready to franchise. What is not included in his list is an examination of unit economics. He mentions "sources of economic revenue" for the franchisor, but largely omits any items related to franchisee profitability at the unit level, nor did he mention franchisee return on investment.
These are important omissions!
In today's franchising, unit economics is king, in yesterday's franchising, it didn't matter. Hence in the recent past, franchising brought us flawed business models where "sources of franchisor revenue" outstripped business models that delivered positive unit economics for the franchisee.
For success in franchising in the future, "franchise startup consultants" need to start adding "franchisee and unit economics" on their punch list of things to understand prior to starting a franchise program.