Global Franchise 10.3

apital is moving fast through franchising, reshaping ownership structures and accelerating deal activity across the sector. Strategic platforms, private equity firms, and family offices are increasingly influencing how brands scale, but the outcomes are far from uniform. Zach Fishman, Chief Growth Officer for Fishman PR, franchise marketing expert and investor, cuts through the noise to examine where consolidation is genuinely adding value, where it creates strain, and why experience, discipline, and partner selection matter more than momentum as franchising enters its next phase. GF: Consolidation is dominating the conversation in franchising right now. Fromwhere you sit, what’s actually changing, and what’s just getting louder? ZF: There are positives and negatives to this trend. On the one hand, franchisors are gaining access to institutional knowledge they wouldn’t otherwise get by partnering with these strategic platforms, private equity firms, and family offices. However, not all capital is created equal. Many of the investors in the past eight to ten years are investing into franchising for the first time, and the brands they acquire are paying the price for the learning curve that “smart capital” is experiencing.When taking on capital works, it REALLY works. But when it doesn’t, franchisees normally end up paying the price. Q: When franchise brands struggle during consolidation cycles, where do the weaknesses most often show up? What tends to break first? A: SNO (sold-not-open) ratios are the biggest indicator of an investment working or going “belly up.” One of the levers that institutional capital often pulls when buying a brand – especially in the early stages – is adding technology or people-power to help open up locations faster. After all, the sooner that locations open, the quicker the franchisor is bringing in royalty revenue. However, finding effective operational staff is franchising’s biggest conundrum. This is where the breakdown happens first. Q: Roll-ups and private equity investment are often framed as a fast path to scale. In your experience, where does that narrative oversimplify what it takes to run a healthy franchise system? A: I think this makes the assumption that all institutional capital is good capital. As time has told us, this is simply not the When capital comes a-knocking As consolidation accelerates across franchising, not all growth capital delivers growth. Zach Fishman explains where deals succeed, where they unravel, and why discipline matters more than momentum. Q & A C 50 GLOBAL FRANCHISE Issue 10.3