In today’s competitive franchise landscape, mastering the franchise development pipeline is critical for franchisors and suppliers alike. Franchise development is at the core of any growth strategy, and the difference between average and exceptional growth in the franchising world can be staggering. In 2023, the average franchise brand opened three new units, while the fastest-growing brands opened as many as 45. As the size of franchise networks grows, the pace of unit openings accelerates, with larger brands seeing an average of 40 unit openings and some hitting as many as 396 in a year.
Franchisors must ask themselves: *How does my brand compare against these averages?* Suppliers should also consider if they’re growing in step with their franchise brand customers, as rapid growth offers significant opportunities for vendors who partner with successful franchises.
Growth Dynamics: Franchisors and Suppliers
It’s important to understand the broader market dynamics driving franchise growth. For franchisors, recruiting new franchisees is critical to scaling their brand, while for suppliers, expanding within franchise systems can unlock new revenue streams.
Franchise success stories like Quizno’s and TCBY are cautionary tales and inspirations. Both brands saw explosive growth after years of steady development. Quizno’s, for example, took 14 years to reach 100 franchised units but quickly scaled from there with the help of 48 area directors. Today, however, the pace is much faster. Brands like Crumbl and 7Brew have reached 100 open and operating units within just three years—an astonishing feat, particularly for brands that require physical locations instead of service-based models that focus on selling territories.
This rapid growth creates pressure for both franchisors and suppliers. Franchisors must act swiftly to secure market share, while suppliers must identify fast-growing brands early in the process to capitalize on their momentum.
Targeting Multi-Brand Franchisees
One of the most fascinating trends in modern franchising is the rise of multi-brand franchisees. The notion that franchisees only invest within a single industry—such as food or retail services—is increasingly outdated. Many franchisees are incredibly diversified, often managing multiple brands across various industries. For example, one franchisee owns 17 fast-casual restaurants and a range of other businesses, from insurance companies to real estate ventures. Dunkin’ franchisees often own additional brands, with 14% of franchisees controlling an average of four brands beyond their Dunkin’ locations.
This trend toward diversification presents a significant opportunity for franchisors and suppliers. Franchisees with experience in running multiple brands demonstrate a high level of operational sophistication, which can make them attractive partners for franchisors looking to scale quickly. For suppliers, these franchisees represent a chance to expand across multiple brands within the same ownership group, offering streamlined sales opportunities.
Understanding Franchisee Demographics
Franchise growth isn’t just about adding units—it’s about who controls them. Take Domino’s as an example. Just 18% of their franchisees control 70% of the system. These operators have the infrastructure and experience to manage large numbers of locations, making them prime candidates for future growth opportunities, whether within the same brand or across multiple brands. For franchisors and suppliers, targeting these high-performing franchisees can be a key growth strategy.
The Future of Franchise Development
As we continue to see unprecedented growth in franchising, the most successful brands will be those that can creatively attract prospects capable of scaling sustainably. This means looking beyond traditional boundaries and targeting franchisees from other systems. Many successful franchisors are already doing this—directly targeting multi-brand franchisees to drive growth.
Suppliers, too, are recognizing the value in identifying fast-growing brands early on and positioning themselves as partners in their success. As the franchise development landscape continues to evolve, the ability to master the pipeline—by attracting scalable franchisees and partnering with the right suppliers—will be the key to sustained growth.
Mastering your franchise development pipeline is about more than just opening new units. It’s about understanding the dynamics of the market, targeting the right franchisees, and aligning yourself with the fastest-growing brands. With insights from experts from FRANdata, franchisors and suppliers alike can position themselves for long-term success in the ever-evolving world of franchising.