Franchise network development
For owners and chief executives of food chains that grow through affiliation, in Italy and in international markets.
A franchise network holds
when the franchisee and the parent company both earn.
The economics of the model are tested before the first franchise is sold: the P&L of the franchised unit, the parent company’s revenue across entry fee, royalty and supply, and the number of outlets beyond which the head office pays for itself.
The scope covers the economics of the model, the operating system that makes the network replicable, and the governance of the network once it is running, in Italy and abroad. The franchise agreement and the pre-contractual disclosure document stay with the company’s lawyer: AC Retail Advisory builds the economic and operating structure those documents rest on.
Who it is for
Companies that have to build the network
Food chains and formats with company-owned outlets already running, weighing affiliation as a route to growth and needing to know whether the model holds before opening it to third parties.
Companies that already have one
Franchisors with a network in operation, where the number of outlets grows and the margin of the franchisee, or of the parent company, does not follow.
The situations an engagement starts from
The format works under direct management and has never been tested in affiliation
The company-owned units return, and that P&L has not yet been rebuilt from the point of view of someone who puts in the capital and works inside it.
The first franchisee asks how long the payback is
The question arrives before the number. Initial investment, break-even and expected return have to be built on the data of the real unit.
The network grows and the parent company’s P&L does not follow
Entry fees, royalties and supply margin come in, and the structure needed to oversee the network absorbs more than the network returns.
Every franchisee applies the standard in its own way
The standard exists on paper and adherence varies from outlet to outlet, because the control system and the training system were built after the agreement.
What the work covers
The replicability test of the format
The model of the reference unit is rebuilt and put to the test: how much of it is written down, measured and teachable to people who were not there when the format was created.
The P&L of the franchised unit
Initial investment, running costs, break-even and months to payback, built on the data of the company’s own outlets.
The P&L of the parent company
Entry fee, royalty, supply margin and the cost of the structure that oversees the network, up to the number of outlets beyond which the head office pays for itself.
The operating system and network governance
Standards, operating manual, indicators and control cycle: what is measured on each franchisee, how often, and who steps in when the number moves. Operations and organization →
The selection and onboarding of franchisees
The profile that holds the model, the selection criteria, and the path that takes a new outlet from the written standard to the applied standard. Training and leadership development →
Development in international markets
Master franchising, joint venture or direct development: the entry form is chosen by comparing expected return, cash absorption and control over the standard.
What the client is left with
- The P&L of the franchised unit, with break-even and months to payback
- The P&L of the parent company and the number of outlets that pays for the head office
- The operating manual of the network, owned by the company and updatable
- The control dashboard of the network, by franchisee and by indicator
- The profile and the selection criteria for franchisees
- The entry form chosen for international markets, with the cost of the alternatives set aside
The experience the engagement rests on
The person who leads the engagement has built franchise networks from inside the company, with the P&L under his own responsibility. As Managing Director of the Italian subsidiary of KellyDeli, the network went from zero to ninety-five corners and revenue from zero to 65 million euro in three years, with a market share of up to 30% according to Nielsen. At Riso Gallo, the launch of the Chicchiricchi chain with the pilot store and the national and international franchise project.
Among the projects on franchise networks run by Andrea Calistri before AC Retail Advisory was founded, the operating system for the franchisees of Old Wild West, in 2015: six months alongside the HR, Finance and Operations departments of the parent company, on network standards, procedures and controls.
Who works on the engagement
Direction of the engagement stays with Andrea Calistri, founder of AC Retail Advisory. Execution is assigned to the professional of the firm chosen according to the scope, introduced to the client before starting.
In international markets the engagement draws on local professionals in the destination countries — franchise regulation, site search, partner selection — introduced to the client before starting.
