If the franchisor is focused on the long-term health of the brand, it is going to make sure it makes a very proactive and thoughtful decision as franchisees move from location No. 1 to location No. 2. What you like to see is that the franchisee is very successful in the first one. It’s a domino that leads to the second one.
We typically know the things we need to know by the time a franchisee approaches us about a second location. Our field operations folks have visited. We’re getting mystery shop scores. We have a number of different touch points from which to measure how that franchisee is doing as it relates to guest service. As it relates to financially how well that first unit is performing, we, like other franchisors, require quarterly financials from the franchisee. We require year-end financial statements and tax returns. Carry on reading this post.