This article by Tom Spadea was featured in the May 2024 issue of Franchise Dictionary Magazine.

Measured Growth Wins

May Franchise Dictionary Magazine Most new franchisors spend a tremendous amount of time, money and energy on how to sign up the greatest number of franchisees in the shortest amount of time. Everyone wants to get into high gear right out of the gate. Starvation is one of the biggest fears and motivators for a new franchisor who has just spent months or even years and perhaps well over $100,000 to launch their franchise system. After all, shouldn’t you judge your success and failure based on the number of customers you sign up? Maybe, but maybe not.

Have you considered how many new franchisees you “should” sell per year? How many can you comfortably open without spreading yourself too thin? We have seen just as many brands die of indigestion as from starvation. In fact, indigestion is a far more painful way to fail as each franchisee you are not able to service causes pain and problems impacting your ability to service others and you get into a death spiral of being completely reactionary to the next upset franchisee.

Overindulgence in franchise sales without a plan on how to properly open, train and service new units is an avoidable problem. The franchisor must have discipline on the front end and be patient by only saying yes to new deals if they know they can support them. It’s a very hard problem to solve once the overindulgence has taken place. I have seen great brands disintegrate and the founders lose control because they got carried away with early successes in franchise sales. The good news is, you are in complete control. Don’t let someone else’s FOMO (fear of missing out) destroy your march toward generational wealth. If they can’t wait until you are ready, they probably aren’t a good match.

To see all of Tom’s featured articles on The Franchise Dictionary Magazine, visit this page.