Operations

Why franchises must rethink growth in a digital-first world

Somia Farid Silber, CEO of Edible Brands, discusses how success in franchising is no longer equated growth only unit expansion. Territory optimization is emerging as a more disciplined approach. Instead of asking how many stores can be opened, systems are asking how many a market can actually support.

Somia Farid Silber, CEO of Edible Brands

July 23, 2026

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The franchise model continues to show resilience. Output is projected to exceed $921 billion this year, with unit count and employment both rising. Those top-line indicators mask a deeper shift. The underlying drivers of growth have changed, and many systems are still operating with an outdated playbook.

For franchise operators, that shift is not abstract. It shows up in store-level profitability, in how far a territory stretches, and in whether a local owner can sustainably run a business day to day.
In a digital-first world, growth is no longer defined by how many units are added. It is defined by how effectively systems connect digital demand, physical locations, and unit-level performance.

That shift is forcing a reset across four areas.

Digital is reshaping the economics of franchising

The customer journey now begins online and often ends there as well. Discovery, evaluation, and even conversion increasingly happen before a guest ever steps into a store. Consumers are no longer following a linear path. They move across search engines, apps, review platforms, and AI-driven tools, validating information before making a decision.
This has elevated digital from a marketing function to a core economic driver. Paid media, delivery platforms, and digital ordering systems now directly influence margins at the unit level.

At the same time, AI-powered search is changing how brands are surfaced and compared. Customers are asking more complex questions and receiving curated answers, which means visibility depends less on traditional SEO and more on credibility and data consistency.

The implication is clear. Digital is no longer only about driving traffic. It is also about owning the customer relationship and protecting profitability across every channel.

Store count is no longer the primary growth lever

For years, franchising has equated growth with unit expansion. That model is being challenged. Territory optimization is emerging as a more disciplined approach. Instead of asking how many stores can be opened, systems are asking how many a market can actually support.

Modern tools now allow operators to identify where their core customer segments are concentrated, how those customers behave, and how far a brand can scale within a given geography without creating overlap.
This matters because oversaturation erodes franchisee profitability. Underserving a market leaves demand uncaptured. Both scenarios limit long-term growth.

In some cases, that means making difficult decisions, including reducing store count or redefining territories. While counterintuitive, pulling back in the short term can create the conditions for stronger, more sustainable growth over time.

In practice, that often results in fewer but better-performing locations, with clearer territory ownership and stronger unit economics.

Customer data is abundant, but often misused

Franchise systems are collecting more data than ever and the challenge is not access. It is execution. A common mistake is prioritizing volume over quality. Poor data creates compounding errors, especially as AI systems rely on it for decision-making and personalization.

At the same time, inconsistent or inaccurate data has direct commercial impact. Sixty-six percent of consumers say they have attempted to visit a business only to find incorrect information online. Eighty-five percent say that experience affects whether they return.

For franchisees, those missed visits are daily transactions that determine whether a location performs or struggles. The shift toward AI-driven discovery is raising the stakes further. Business information must now be accurate across platforms and across systems that aggregate and interpret it.

The takeaway is straightforward. Data strategy is now a growth strategy. Systems that fail to unify and validate their data will struggle to compete, regardless of brand strength.
Centralization without local execution limits performance

Franchising has always required a balance between system-wide control and local ownership. Digital scale has made that balance harder to maintain. Operators tend to fall into one of two traps. Over-centralize and lose local relevance or remain fully decentralized and fail to build consistency.

The systems that scale effectively separate strategy from execution. Core decisions such as pricing frameworks, vendor relationships, marketing systems, and performance measurement are centralized. Execution remains local. Sales, staffing, and day-to-day operations stay with the operators closest to the customer, where speed and market knowledge matter most.

The most effective systems also recognize that the best ideas often come from those closest to the work. Structuring the organization to capture that insight, rather than override it, is critical to long-term performance.

This balance allows brands to maintain efficiency without sacrificing responsiveness. It also reinforces accountability at the unit level, which ultimately drives results.

What many systems are still missing

Several gaps remain across the industry. Speed is one of them. Customer behavior, digital platforms, and technology are evolving faster than most franchise systems can adapt. At the same time, franchising remains a relationship-driven model, where change takes coordination across operators, markets, and stakeholders. Bridging that gap between speed and structure is becoming a defining challenge.

Another gap is integration. Many systems still treat digital, physical operations, and franchise development as separate functions. In reality, they are increasingly interconnected. A weak digital experience can reduce store traffic. Poor unit economics can undermine franchise sales. Disconnected data can affect both.

There is also a tendency to underestimate complexity. As brands expand across formats, channels, and in some cases multiple concepts, growth requires clearer differentiation, stronger internal alignment, and more disciplined execution.

Even as systems become more data-driven, the goal remains unchanged. Customers are not just looking for efficiency. They are looking for experiences that feel relevant, personal, and worth returning to.

The franchise model remains strong, but the definition of growth is changing. It is no longer about expanding footprint as quickly as possible. It is about building systems that can sustain performance across channels, markets, and customer segments. That includes aligning digital strategy with unit economics, using data to guide expansion, and structuring organizations to balance scale with local execution.

The franchise model is not being disrupted. It is being refined. The systems willing to rethink long-held assumptions and operate with greater precision will define what growth looks like next.

Edible Brands, which owns Edible Arrangements and Roti, operates over 1,000 locations.