Unit Economics Are The New Brand Story For Franchisors

“Success in the franchise industry requires having a strong, differentiated brand.” It’s something of a truism, and while we’re not here to argue that it isn’t true, it completely ignores the most important part of any business endeavor: the bottom line. So why does it feel like, in recruitment situations where competition for the best candidates is real, so many franchisors default to selling the brand they’ve built, not the opportunity they’re providing?

Many brands feel the need to lead with their long-workshopped story to humanize their business and make their franchise opportunity feel like “more than numbers,” but the fact of the matter is that unit economics tell the most relatable entrepreneurial story of all: the one where someone provides a service people in their community need and makes money doing it. In an environment where economics are tighter for the vast majority of the population and stories of franchisees’ bad experiences with poorly run systems gain more and more viral traction, it feels like unit economics are the brand story now.

Consumers are warier than ever when it comes to being sold a campaign or told that a brand is great via its own literature and owned channels. That goes for discerning franchisee candidates as well. When a brand focuses their recruitment messaging heavily on mission, culture, and values, it can feel like something of a smoke screen if the wealth of that material makes it harder to find or focus on the numbers that indicate how successful current operators truly are.

Franchisee trust factors

Recent research from The Consultant Exchange shows that entrepreneurs and franchise brokers are currently focusing on doing business with trustworthy brands that communicate effectively. That means reputation, transparency, and the ability to answer a rigorous due diligence process are more important than ever for recruitment.

Here’s something else to consider when you’re talking to franchisee candidates, current owner-operators, or C-suite executives: everybody speaks the language of dollars and cents. When you focus on unit economics, you’re talking about something that everybody in business can relate to. When you talk about your franchise system by always leading with brand and values and story, you’ll engage some but lose the attention of the stakeholders who are most focused on business metrics – and those people are often influential in the most important decisions.

As one famous franchisor once asked, they’re wondering, “Where’s the beef?”

For those reasons and more, we’ve entered the era of bottom-line messaging.

Unit economics focus

In franchising, it’s often said that people need to “trust the model” and “follow the playbook.” It may sound cynical, but anybody who isn’t focused on unit economics in a franchise setting is already failing to follow the model. That goes for franchisors and franchisees alike.

If a brand’s corporate leadership isn’t focused on setting franchisees up for business success, they’re not really doing franchising; they’re just selling territories and collecting royalties. On the other hand, when an operator doesn’t stay laser-focused on economics, they’re deviating from the purpose and intent of the system they bought into.

That’s why unit economics are the perfect place for a franchisor and its network of individual owner-operators to rally together. When your system is focused on unit economics, it’s easier to identify your top performers and from there uncover the mindsets, strategies, and habits that are building success for them. At the same time, unit economics provide an objective and clear standard by which to identify struggling locations and push them toward improvement without things feeling as personal.

It’s also easier to see where the development team is succeeding and falling short in its goals of recruiting and supporting strong franchisees.

Once you’ve built that culture of honesty, transparency, and rigorous dialogue around unit economics within your franchise team, it becomes much easier to package and mobilize that message in ways that ensure the continued health and growth of the system.

When your brand is focused on unit economics and seeing success across your system, the story of your team’s successful operations becomes the strongest possible narrative you can tell. If you’re comfortable talking about unit economics and have something to brag about, there’s no better way to attract serious, efficiency-minded entrepreneurs or convince the world at large that you are doing something special.

Case studies and enthusiastic testimonials from current franchisees are always among the most powerful marketing materials you can have in your arsenal when it’s time to recruit and nurture new potential candidates. Focusing on unit economics makes those stories even more powerful and effective when it comes to getting people excited about your brand. It’s one thing be able to point to a franchisee who’s having a good experience; it’s taking things to the next level if you can actually illustrate what consistent success looks like across your system.

If you’re a franchise consultant or work as part of a development team, the next time someone asks you to tell them about your brand, try leaving the brand and mission for the end and lead with the unit economics. You might discover the numbers tell a story that’s far more compelling – one way or the other.