The Secret to Retaining Your Best Franchisees

As a franchisor, how familiar are you with your A-list franchisees? We’re talking about the ones who seemed destined for greatness the minute they arrived for Discovery Day. Acquiring, nurturing, and retaining top talent is a crucial component to an organization’s success — even more so in the franchising industry. While building and refining a strong brand and accompanying support system will always be essential, the people ultimately make the difference. As many franchisors know, developing blue-chip franchisees into standout leaders requires strategic mentorship, ongoing engagement, and smart incentivization.

What follows are some insights and actionable advice on how franchisors can identify, develop, and retain the best of the best franchisees in their network. (The kind of franchisee you think of first when a validation request comes in.)

Related: If You Want to Hire Good Entry-Level Talent, Offer These 3 Game-Changing Opportunities

Common characteristics of top talent

With some franchisees, you just get a feeling: a gut instinct that a new owner is destined to become a standout performer. While it’s easy to gauge how successful they’ve been in their career to date, there are a few common denominators that check all the boxes. The best franchisees don’t just follow the system — they elevate it. They understand that success in franchising is all about balancing entrepreneurial drive with strict adherence to the brand’s proven business model. What are some of their characteristics and traits?

• Strong Business Acumen – They understand financial management, marketing, and operations, with confidence in knowing how to make strategic decisions that drive profitability.
• Resilience and Adaptability – Typical top-performing franchisees embrace challenges and adapt quickly to market shifts without losing focus on the overall mission.
• Commitment to Brand Standards – While innovative, they know better than to go rogue. They have the innate ability to follow the franchise model while finding incremental ways to improve efficiencies within its framework.
• Leadership and Team Development – Top performers are almost always highly charismatic – they build strong teams, invest in employee growth, and foster a positive workplace culture. And others are willing to follow their lead.
• Customer-First Mindset – They prioritize the value of providing a superior customer experience, leading to strong retention, positive reviews, and organic growth.

In sharing the best practice standards they exemplify, franchisors should identify, replicate, and encourage these qualities among other franchisees in the network.

Related: Layoff Anxiety is Holding Your Employees Back — 5 Ways to Hire and Retain Top Talent in 2025

Catch a rising star

While some of your eventual top performers initially fly under the radar, almost all possess early indicators of greatness. What are the signs and how can you spot them?

• Early Engagement with Corporate Support – Franchisees who readily participate in training, advisory boards, and networking events often demonstrate their leadership potential.
• Data-Driven Decision Making – If a franchisee actively reviews KPIs and adjusts accordingly, they’ll likely be future standouts
• Consistent Improvement – Top-performing franchisees strive to improve sales, customer satisfaction, and operational efficiency. Even if they start slow, it’s indicative of a growth mindset.
• Innovative Thinking (Within the System) – These self-starting up-and-comers aren’t reckless risk-takers, but they do find ways to optimize processes while staying within brand guidelines.
• Willingness to Mentor – They aren’t just invested in their own success, but also in the success of others. Rising talent will proactively assist fellow franchisees, demonstrating leadership qualities that can benefit the entire system.

Related: How Even the Smallest Startup Can Win the War for Talent

Incentivization is key

If you truly want to coach up and develop an elite group of franchisees, look into the following programs and initiatives that keep them engaged, motivated, and prepared for leadership:

• Multi-Unit Expansion Opportunities – Reward high-performing franchisees with priority access to new territories or discounts on additional units.
• Exclusive Leadership Roles – If you haven’t already, create regional advisory positions where top franchisees can mentor others and contribute to system-wide improvements.
• Revenue-Based Incentives – Offer royalty rebates, reduced fees, or marketing co-op funds to high performers as a reward for exceeding KPIs.
• Recognition and Awards – Look for award opportunities that celebrate franchisee achievements at annual conventions, through franchise-wide newsletters, and on corporate social media.
• Educational and Executive Development – Provide access to executive-level training programs, industry conferences, or franchisor-led masterclasses to encourage continuous learning.

Above all, keep it equitable and don’t play favorites. Develop and share a clear roadmap for growth and rewards that is open to all comers.

Keeping them in the fold

Recruiting and maintaining top talent is one thing. Keeping them around is another. To ensure you retain your elite performers, consider the following initiatives:

• Ensure Profitability – A profitable franchisee is a happy franchisee. Strive to ensure healthy margins, fair pricing, and scalable growth opportunities.
• Offer Growth Tracks – Encourage top franchisees to expand by offering priority access to new locations, strategic acquisitions, or even master franchise roles.
• Elevate Their Voice – Top franchisees want to be heard, so involve them in pilot programs, corporate strategy discussions, and beta testing for new products or services.
• Support Multi-Generational Succession – Many top franchisees are business owners for life. Offering succession planning resources keeps franchises in the family and maintains system strength.
• Keep Fees and Royalties Competitive – If franchisees begin to feel corporate takes too much, they may leave. Balancing fees with tangible support and ROI prevents such defections.

Building a network of standout franchisees requires a deliberate investment in their success. By identifying high-potential talent, creating structured growth incentives, leveraging advisory councils, and fostering a long-term vision for retention, franchisors can build a stronger, more engaged network capable of fueling system-wide growth.

Related: Cultivating A Growth Mindset: Strategies For Personal And Professional Development