by Keith Gerson, CFE
In franchising, growth strategies are everywhere such as more leads, new markets, faster conversions. But let’s cut through the noise, and see how your biggest growth lever might already be inside your system.
Too many brands are chasing expansion while quietly bleeding from within. Franchisee turnover is expensive. Recruiting, onboarding, and training new owners’ costs time, money, and momentum. If you’re not actively investing in the success of your existing franchisees, it’s like pouring water into a bucket with a hole in it.
Here’s an example of what one of those holes can really cost you. Smart lenders track one metric above all others: franchisee turnover. Keep it at 5% or less, and doors open. Let it creep higher, and watch financing dry up. Not just for you, but for your franchisees trying to expand, remodel, or upgrade equipment. High turnover screams risk. And banks don’t lend to risk.
But the damage goes deeper than denied loans. Your credibility takes a hit with suppliers, investors, and prospects. Word travels fast in franchising circles. A reputation for churning through franchisees? That’s a growth killer that no marketing budget can fix.
Retention isn’t a buzzword it is your foundation.
Take Discovery Days, for example. Are they solely about wooing new candidates? Flip the script. Celebrate top performers. Share their journeys. Let prospects see that this brand builds legacies and not just launches locations. Show your franchise prospects that it’s not a revolving door and it’s a community of long-term wins.
Here’s the hard truth though, your franchise agreement starts the relationship, but your daily actions define it.
Are you offering real support, or canned responses? Are you solving problems, or sending them in circles?
Think about something as basic (but vital) as your POS system. If franchisees complain about inefficiencies or clunky workflows, what happens next? A neglected complaint becomes a broken relationship. But timely upgrades and responsive action? That builds trust and loyalty.
Empowerment isn’t a one-time onboarding task. It’s continuous.
Ongoing training. Best-practice sharing. Regular check-ins. Open forums. And most importantly your follow through. Don’t just collect feedback. Act on it. Show franchisees that their voices shape your decisions. That’s how you transform skeptics into brand ambassadors.
The result? Your best franchisees stay longer, perform better, and organically promote your brand. Not because they’re required to, but because they believe in it.
Don’t just set big goals, build the kind of brand where franchisees power those goals. They’re either your biggest liability, or your greatest asset.
Dr. John P. Hayes, CFE Keith Gerson Gerson Advisory Services Titus Center for Franchising at Palm Beach Atlantic University Titus Center Interns Joe Caruso Michael (Mike) Webster PhD
Editor – Recent graduate of the Titus Center for Franchising at Palm Beach Atlantic University, Alessia Passerini
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Keith Gerson, CFE, is a globally recognized franchising expert with 50 years of experience. As President & CEO of Gerson Advisory Services, he’s known as a super-connector, trusted advisor to top franchisor CEOs, and thought leader whose webinars, articles, and the FranConnect Franchise Sales Index Report have earned him a massive industry following.