The margins of a single restaurant are too thin to justify the operational complexity and stress. Profitability and a sustainable business model emerge only when you scale to multiple locations, allowing you to amortize fixed costs and achieve operational efficiencies.

While one or two franchise units can provide a solid side income, replacing a high-earner's corporate salary (e.g., $250,000+) generally requires building a portfolio of three or more locations. This provides a realistic benchmark for professionals considering franchising as a full-time career change.

The potential scale for a multi-unit franchisee is enormous. The Flynn Group, a family-run franchisee operator, generated over $6.3 billion in revenue, surpassing the total revenue of entire franchisor brands like KFC, Domino's, and Popeyes. This demonstrates that top operators can build empires larger than the parent companies.

Franchising has evolved beyond a mom-and-pop model into a sophisticated asset class. Private equity firms and former investment bankers are now actively acquiring and rolling up large franchise portfolios, signaling a shift towards treating them as major institutional investments.

Franchising is a different business model focused on systems, training, and brand protection. Before considering it, a founder must first prove their concept is replicable by successfully opening and operating a second company-owned location. This provides the necessary data and validates the model's scalability.

To build a successful franchise, a business must first prove its model is profitable and repeatable. This requires operating three to five corporate-owned stores to perfect unit economics, training systems, brand voice, and operational simplicity before licensing the model to others.

Todd Graves explains that while his franchisees were exceptional (rated 85/100), they couldn't match the meticulous quality of corporate-run stores (95/100). This gap, plus the inefficiency of implementing changes across a franchise system, drove his preference for corporate ownership to maintain ultimate brand integrity.

Investors in restaurants typically receive 70-80% of profits until their initial investment is returned. Afterward, this flips, and they retain a smaller percentage (e.g., 20%) in perpetuity. This structure prioritizes cash flow distribution over a distant, uncertain exit.

Founders often see franchising as a way to scale without managing more employees. However, it shifts the people problem to managing franchisees. This requires enforcing brand standards and managing underperformers who are also business owners, a group that can consume 80% of your time.