Practice
Franchise Development
The brand is not the asset. A franchise is an operating system sold as a business, and both sides of the transaction routinely diligence the wrong one.
All capabilitiesOur approach
Our perspective.
Franchising is a reading discipline: Item 19s, Item 20 outlet tables, and lender performance read the way an underwriter reads them, for franchisors building systems and for buyers entering them.
Set any brand’s recruitment deck beside its own outlet tables and its lenders’ experience with the brand, and see which document predicted the operator’s outcome. Franchising is won by whoever reads the public record best, and the record is now deep enough to settle most arguments a sales process starts. The practice is that reading, industrialized.
The same reading runs in both directions, and that is the practice’s edge. For franchisors, the work is building the system that survives it: an Item 19 the data can defend, unit economics that hold at the median rather than the showcase, recruitment that screens out the operator who would populate a future exit table. For buyers, the work is running the reading before the deposit: brand selection from evidence, the FDD read as underwriting, territory modeled on demand rather than distance. For the treaty investor, the acquisition carries a second examiner: that engagement runs jointly with the firm’s Investment Migration practice, where named attorneys decide and sign everything legal.
Common challenges
The challenges we help address.
The survivor’s average
An Item 19 is a volunteered number: a franchisor chooses whether to publish one and which units it describes. The outlets that closed or transferred last year are not in that average. They are in Item 20’s tables, and the departed operators behind them are listed in the exhibits with contact information. Most buyers call the references the franchisor picked instead.
Growth that eats the system
The royalty is charged on revenue; the franchisee lives on margin. A system can therefore grow while its median operator shrinks, until the divergence surfaces in outlet tables, validation calls, and lender data, and the cost of recruiting rises to meet it. Awarding units faster than the median unit’s economics justify is borrowing against next year’s FDD.
Territory measured in miles
Protected territories are negotiated in radii and zip codes; demand lives in drive times, density, and daypart economics. And many agreements protect the operator only from other franchisees while reserving the franchisor’s right to sell into the same ground through other channels. The map is not the protection. The reserved-rights clause is.
How we work
How the engagement runs.
- Step 1
Diagnose
Read the record first: FDD, outlet tables, lender performance, and litigation history for every system under consideration. For a franchisor: your own system, read the way a data-literate buyer will read it.
- Step 2
Architect
Build the economics at the median: unit-level P&L, territory demand model, capital plan. For franchisors: the Item 19 architecture the system can honestly publish and defend.
- Step 3
Build
Carry the transaction: buyer-side diligence from shortlist through letter of intent to close, counsel in their lanes; franchisor-side, a recruitment pipeline designed to disqualify early.
- Step 4
Operate
Hold the system against its numbers: an operating cadence for the new franchisee’s first year; for franchisors, a standing read of outlet health, so the next FDD improves because the system did.
Deliverables
What the work produces.
- Brand selection dossier
- Decide which systems earn a place on the shortlist — from the public record, not the sales process.
- FDD & unit-economics read
- Decide what the median unit actually earns, with Item 19 and Item 20 read as one document.
- Territory demand model
- Decide what a territory is worth in demand terms before it is negotiated in miles.
- Item 19 & recruitment architecture
- Decide what the system can honestly represent — and which candidates it should refuse.
- E-2 business underwriting brief
- Decide whether the unit economics hold before the deposit — on a record counsel will build on.
Evidence
From the case studies.
Practice leadership
Related insights
The thinking behind the practice.
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