I have seen it happening in many places around the world! Someone that has one successful location (restaurant, café…) and either this person plans to franchise out this concept or one of the customers ask the owner if it is possible to franchise out the concept!
Is it wrong? Absolutely not! Is it right? Also not! It all depends on the concept itself!
If a concept is well designed and created to respond to market needs and if the owner has designed a professional franchise package, franchising out the concept might go successfully even if the owner was running a single location for one year!
But if there is nothing unique about the concept, and it simply happened to be located in a trendy neighborhood or has a high dependence on personal charisma, a chef, or founder presence, and this concept was seeing short-term success due to one or more of these elements, be assured that the moment anyone buys this franchise, it will be like wasting money with no planning! As it is a matter of a few months after the grand opening and the business will start suffering from dropping sales and unsatisfied customers and business partners.
There are basics for a concept to test as successful!
- Proven Concept Performance
- Consistent profitability over 2–3+ years (not just one hit year).
- Strong same-store sales growth.
- Positive customer feedback, retention, and repeat visits.
- Sustainable unit economics: Gross margins, food & labor costs are healthy.
- Replicability & Scalability
- Can the concept be easily duplicated in other markets?
- Operations are not overly dependent on the original owner/chef.
- Ingredients, equipment, and supply chain are accessible and affordable elsewhere.
- Standardized and documented operating procedures (SOPs, recipes, manuals).
- Brand Strength & Differentiation
- Unique Selling Proposition (USP) — what makes it stand out?
- Does the brand resonate beyond the local area?
- Strong visual identity, name, and story.
- Franchisee Demand
- Are people actually asking to franchise the concept?
- Do you have interest from qualified, capable franchisees?
- Market Research & Demand
- Is there national/regional demand for your type of food and concept?
- Competitor analysis: How are similar franchises performing in target areas?
- Demographic fit for the brand in new locations (fast casual vs. fine dining).
- Financial Viability
- Clear financial model with realistic ROI for franchisees (ideally ROI within 2–3 years).
- Transparent franchise fees, royalties, and support costs.
- Strong unit-level economics with scalability.
- Franchisor Readiness
- Are you legally and operationally ready? (FDD, trademarks, legal structure)
- Do you have a franchise support system? (training, marketing, site selection, operations)
- Can you manage franchisees and ensure brand consistency?
- Test Locations
- Have you successfully opened more than one company-owned store in different markets?
- These second/third stores are often a better test than the original flagship.
📊 KPI Benchmarks (for franchise success potential)
Metric Benchmark
- Average EBITDA per unit 15–20% or higher
- Franchisee payback period < 3 years
- Average unit sales > $1M (depends on category)
- Labor cost 25–30% of revenue
- Food cost 25–35% of revenue
- Marketing % of revenue 3–5%
- Training & onboarding period < 2 months
It is rare in these days to find a chain with the majority of franchisees that are satisfied and happy with the franchisor. In the majority of the cases, they blame the mother brand for their poor performance and in many cases, things go legal between the parties. To avoid all of that, it is better to understand the above points before franchising a concept!
Cafe de Vie 