Before you multiply
A business that works is not the same as a business that replicates.
What makes a first unit succeed is very often the exact thing that cannot be copied — you in the shop, a location that was lucky, a supplier who takes your call because he has known you fifteen years. Scale strips all of it out and asks what is left.
Two people, one question
This page is for two people who look different and are asking the same thing.
You own a unit that works, and you are considering a second, a fifth, or a territory as an area developer or master franchisee. Or you run a business with your own outlets and people keep asking whether they can open one under your brand.
Both of you are about to multiply something you have only done once. The question underneath is identical: does this survive being copied by someone who isn't you?
The assumption that costs the most
Because the unit works, more units will work.
It is the most expensive assumption in Indian franchising and it is made identically on both sides of the table.
- Nobody has run the second layer. Scale inserts a royalty, an area office, a regional manager, a training function or a supply chain between the unit and the owner. The unit pays for all of it, and almost nobody computes whether it can.
- The business is the founder. Neither audience has tested whether the unit performs when they are not in it.
- Nothing is written down. No SOPs, no training architecture, no franchisee profile — and the plan is to write them later.
- The cash is assumed. Nobody has mapped what funds unit three before unit two has repaid.
I am not selling this from the seller's side. I failed to buy it.
By 2012 we had built a 10,000 sq ft central kitchen — bakery, confectionery, cold kitchen, hot kitchen, two walk-in cold rooms, a refrigerated van. Built to flight-catering standard and designed to supply twenty outlets. We were at about ten stores.
That is when we sat down with a franchise consultancy about expanding. Their proposal came in two phases. The first was paid work: audit our readiness, tell us what had to change before we could franchise properly, then build the systems to run a network. The second was recruiting franchisees on a success fee.
I was ready to proceed. My partners were not, and I could not convince them. The sticking point was the first phase — a few lakh rupees, against a business we had put crores into. We did not engage them.
In hindsight that was a mistake, and mostly mine. I had the argument to make and I did not make it well enough to land.
I want to be careful about what I claim. The brand did not end because of that decision — we exited years later because the market filled with home bakers and turned price-sensitive. What skipping the systems work did was remove an option. I never found out what a properly built network would have done for us.
Two things came out of it, and both are why this service exists in the shape it does. The diagnosis was worth paying for, and I am the one who didn't buy it. And the second phase — a success fee on recruiting franchisees — is the part I do not offer on this work. Whoever tells you whether you are ready should not be paid when you sign people up.
The GV Scale Framework
- 1Unit ProofA repeatable unit, or one good location you have mistaken for a model?
- 2Operator DependencyTake yourself out for ninety days. What breaks, and how fast?
- 3Second-Layer EconomicsCan the unit carry a layer of cost above it and still be worth owning?
- 4TransferabilityCan a stranger be taught this, to a defined standard — and which stranger?
- 5Capital & Cash CycleWhat funds unit three before unit two has repaid?
- 6Downside & UnwindWhat breaks first, and how do you end it?
- 7Scale DecisionScale now · fix first · scale differently · don't scale.
On the third verdict:
Scale differently deserves naming, because it is the verdict people rarely hear. Franchising is one instrument among several — company-owned expansion funded more slowly, a management or operating lease, licensing without the operating model, distribution instead of retail, a joint venture bringing capital you lack.
I took that route myself. Our family had run cinemas since 1958. When we built a new multiplex I argued for separating ownership from management and signed an eighteen-year operating lease rather than running it ourselves. It kept the capital for interiors and equipment out of our hands and removed an operating burden we did not need to carry. Not scaling ourselves was the right answer, and it was not the obvious one.
What you'll hold at the end
- A written verdict with a reason — scale now, fix first, scale differently, or don't scale. Defensible to a board, a family or a lender.
- The second-layer number — what the unit actually earns after everything above it takes its share, computed from the franchisee's side rather than yours.
- The specific things that must be true before you multiply — named, sequenced and costed, whether or not you engage further.
- A business that no longer needs you in the room — the point of the infrastructure is not more units. It is units that hold the standard while you are somewhere else. That is the difference between owning a network and being employed by one.
Ask yourself
Take yourself out for ninety days. What breaks, and how fast?
What does my franchisee earn after my royalty, my levy and my supply margin? Have I ever built that P&L?
Who runs unit two? Name them.
What funds unit three before unit two has repaid?
If a franchisee damaged the brand, how would I end it — and what would that cost me?
Who this isn't for
- Fewer than three outlets, or no outlet with eighteen months of settled trading behind it.
- No outlet that performs without you present.
- Nothing written down, and no real intention to write it.
- A plan to fund the system build out of franchisee joining fees. That is the trap — it forces you to sign people you would otherwise refuse, because you need their cheque to build what you promised them.
- An expectation that I should be paid a share of what you earn, or a fee per franchisee signed. I don't take that kind of fee on this work.
The first conversation
Thirty minutes, no fee.
Where it makes sense, the first step after that is a Scale Readiness Audit: a few weeks inside your numbers, a written verdict, and findings you did not have. The audit is deliberately the front door. Only if it is warranted do we talk about a Franchise System Build. If the answer is that you are not ready, you will have found that out before committing to the build.
I will tell you what each step involves and what it costs before we start, and there is more than one way to get a system built. Before you choose, I will tell you how I'm paid on each route open to you.