Which Franchise Units Deserve Another Investment? Part 2

The allure of new locations can be powerful, but before moving forward, it's important to make sure current units are operating as intended. Consider a regional director assigned to stabilize a struggling location while preparing another unit to open. Both need recruiting and on-site coaching. The weaker location also needs capital that could fund improvements at an established unit.

For part one, click here.

Compare the choices

Once the cause and resource demands are clearer, compare the feasible alternatives. Reinvestment commits capital and leadership time to a defined recovery. Repositioning needs a credible market case and confirmation that the proposed use or format is permitted. Continuing operations can provide time to gather evidence with a limit on spending and a date for deciding what comes next.

A sale may work for an operator with nearby locations or available management capacity. Examine net proceeds, any obligations that would remain, and the effect on the locations you retain. Closing requires its own plan for employees and the cost of leaving the site.

Have franchise counsel review relevant lease terms, guarantees, transfer or closure provisions, and development commitments. The finance team should compare the costs and cash requirements. Franchisor discussions can establish which approvals or changes are possible before the owner treats an option as available.

For the regional director's assignment, compare what each choice does to the opening. A recovery that delays the new team may still be justified. The owner needs that consequence in the decision along with the expected benefit of keeping the weaker location.

Use a short decision screen in the review meeting:

• What is causing the performance gap, and which causes can the proposed investment realistically change?
• Identify the unit's contribution to the portfolio. What would need replacing if it were sold or closed?
• Who can lead the work, with what authority, available time, and funding? What must happen first, and which priorities would wait?
• Compare the feasible options. How would each affect nearby units, employees, remaining obligations, and the owner's next move?
• Set the maximum commitment, evidence required, and review date. Which result would justify a larger investment or a change of course?

Get evidence

Tie milestones to the problem being tested. If the director is addressing staffing failures, look for reliable shift coverage and improved service after training. Filling a manager position establishes that someone has been hired; the operating results still need to change.

Before authorizing a larger project, review whether improvement holds as extra support is reduced. Check which decisions still return to the owner. If routine staffing and spending exceptions continue to require the owner's intervention, include that ongoing demand in the larger investment case. Also account for the effect on the opening and any established units that have been waiting for help.

Choose a review period that covers the relevant operating cycle with an earlier review if spending or performance crosses an agreed limit. The director should report the evidence and recommend the next decision. Any extension needs a reason grounded in new information and an explicit approval of further resources.

Key takeaways

• Match the proposed spending to a cause it can change.
• Leadership time has a portfolio cost. Make delayed work visible.
• Sale and closure can leave costs behind or remove useful support for other units.
• Require operating evidence before expanding a recovery commitment.

Choose one location currently under review. Record what it contributes, why performance is weak, and what improvement would require. Name the leader and their authority, set the capital limit, and put the review date on the calendar.

With those decisions clear, the owner can judge the next commitment across the whole portfolio. The assigned leader can act within defined limits and return with a recommendation when the evidence changes. Fewer routine exceptions need the owner's intervention, leaving more attention available for the next operating or growth decision.

Kendall Rawls with Rawls Succession Planners partners with multi-unit franchise owners at a board level to help ensure growth does not create hidden risk. We focus on reducing dependency, strengthening leadership capacity, and making sure complexity doesn't quietly limit future options. To pressure-test where your organization still relies on you, and where it no longer should, contact us to arrange a private consultation. Visit seekingsuccession.com or email [email protected].