You know that feeling when you go to your favorite chain in a different city and everything tastes… off? Like the fries are doing an impression of fries, and the burger has the personality of a damp paper towel?
Yeah. That’s not always “the cook had a bad day.” Sometimes it’s the business model.
Some of the most beloved restaurant chains could franchise tomorrow and basically print money. Instead, they keep a death grip on ownership and expand at a pace that feels like watching paint dry. (And yes, I’m the type of person who has watched paint dry. It’s a lifestyle.)
Let’s talk about why certain chains refuse to franchise and what that has to do with the meal in front of you.
First, what “franchising” actually is (without the MBA headache)
Franchising is basically: a restaurant company sells you the right to use their name, menu, and system. You (the franchisee) pay:
- A one time franchise fee (often in the tens of thousands)
- Ongoing royalties (usually a percentage of sales think 4-8% range)
- And the big one: you pay to build the place (construction, equipment, signage… all the stuff that makes your bank account whisper, “ma’am, please stop.”)
That buildout can easily land in the hundreds of thousands to millions depending on the concept and location. The parent brand gets faster growth without paying for every new store themselves, and the franchisee gets a recognizable name (plus a big binder of rules).
And it works. It’s why franchising dominates fast food. A lot of major chains are mostly franchised meaning the corporate brand doesn’t run most day to day locations.
So if franchising is such a rocket ship, why do some brands look at it and go, “No thanks, I like sleeping at night”?
The three ways chains grow (because “they don’t franchise” can still be… complicated)
When people say a chain “doesn’t franchise,” it usually means they lean hard toward one of these:
- Company owned: The brand owns and operates the restaurants. Employees work for the company. Corporate has the wheel.
- Franchised: Independent owners run the locations under the brand’s rules and pay royalties.
- Licensed / hybrid: You’ll see this in airports, college campuses, grocery stores places where the brand partners with someone else, but often with tighter guardrails than a typical franchise.
So yeah some chains will swear they “don’t franchise,” then you’ll see one in an airport and feel betrayed. That’s usually licensing, not classic franchising. Different beast.
Why some chains cling to total control like it’s the last fry in the basket
I’m going to say something controversial: sometimes being a control freak is… correct.
Here are the big reasons brands stay mostly company owned.
1) Consistency (aka: “I want my burrito to taste like the same burrito”)
When a company owns all the stores, they can change things fast and enforce them fast.
- New recipe? Roll it out.
- Supplier issue? Switch vendors.
- Manager tanking the vibe? Bye.
With franchising, you’re not telling you’re negotiating. You can set standards and do audits, sure, but you’re working through contracts and independent owners with their own budgets and opinions and probably a group chat where they complain about corporate. (I’m not judging. I’d complain too.)
And yes, owners can be tempted to cut corners. Cheaper ingredients. Fewer staff. Skipping a deep clean that absolutely needed to happen yesterday. You might not see it, but you’ll taste it. You’ll feel it in your soul.
Consistency is the whole point of a chain! If I want a thrilling surprise, I’ll try the “chef’s experimental special” at a place with mismatched chairs.
2) Speed matters when things go sideways
Everyone loves “pivoting” when it’s a cute little business buzzword. It’s less cute when it’s “pivot because the headlines are coming.”
A company owned chain can implement changes across stores quickly: food safety procedures, retraining, pricing updates, whatever. A heavily franchised system can take forever because you’re wrangling a ton of owners, each with their own timelines and willingness to spend money.
Chipotle is the classic example here: it scaled to thousands of locations as a company owned chain. And when it hit those well publicized food safety problems years back, it needed to roll out consistent new procedures fast. Ownership makes that kind of system wide overhaul way easier.
Not glamorous, but effective. Like putting a lid on your trash can before the dog discovers free will.
3) The money can be better when you own the store
Here’s the part that surprises people: franchising isn’t always the “most profitable” choice for the parent company.
If you franchise, you might collect, say, 6% of sales as royalties. That’s real money, but it’s a slice.
If you own the store, you get all the revenue and after expenses, a well run restaurant might keep a much bigger chunk as profit (numbers vary wildly, but you get the idea). On a high performing location, owning it can be way more lucrative than collecting a royalty check.
So sometimes “no franchising” isn’t some romantic purity pledge. Sometimes it’s, “Actually, I’d like to keep the whole pie, thanks.”
4) Culture (the most overused word… that still matters)
I know, I know. “Culture.” It sounds like a poster in a breakroom with a stock photo of someone high fiving.
But in restaurants, culture shows up in real life stuff: pay, training, promotions, benefits, turnover, cleanliness, how managers treat people, whether your order gets made with care or tossed together like a punishment.
When everything is company owned, the brand can standardize how employees are trained and treated. That’s harder in a franchise system where an owner might be trying to squeeze labor costs until the place runs on vibes and one exhausted teenager.
In-N-Out is famous for this: they’re known for paying better than you’d expect, promoting from within, and keeping tight standards. That’s a lot easier when there isn’t a franchise owner saying, “But what if we staffed one person per shift and simply believed in teamwork?”
Real life examples (aka: “Okay, but who actually does this?”)
In-N-Out: “No, you can’t buy one”
In-N-Out has famously resisted franchising for decades and published a complete menu nutrition guide. They grow slowly, deliberately, and they’re very into doing things their way. Fewer locations, tighter control, and the kind of consistency people plan road trips around.
It’s annoying when you don’t live near one in regional burger chain markets, yes. But you can’t argue with the results. It’s the restaurant version of that friend who won’t settle high standards, fewer bad decisions.
Starbucks: “It’s not franchising… but it’s not not franchising”
Starbucks is where people get confused. Many Starbucks cafés are company owned, but you also see licensed Starbucks in airports, grocery stores, universities, etc.
Those licensed locations aren’t “franchises” in the traditional sense, but they’re also not fully corporate run. The brand still wants your latte to taste like Starbucks, not “mystery airport coffee with notes of regret,” so licensing tends to come with strict requirements.
Hybrid models like this are basically a chain saying: “I want growth, but I also want my brand to stay recognizable.”
The part nobody wants to talk about: owning everything is expensive and stressful
If you’re thinking, “Okay, so why doesn’t everyone just stay company owned?” Because doing everything yourself is the business equivalent of saying, “I’ll host Thanksgiving at my house,” and then realizing you now own 14 pounds of turkey and everyone’s opinions.
You grow slower
Franchising is the highway. Company owned is the scenic route with construction, a detour, and a random goat crossing.
A franchised chain can expand faster because franchisees are funding the growth. Company owned expansion takes time because the brand has to open (and staff, and manage) every location themselves.
You need a mountain of capital
Opening a new restaurant is wildly expensive. Construction, equipment, permits, initial payroll, inventory… it adds up fast. Even if a brand is doing well, there’s still a limit to how many new stores it can afford to open at once.
“Just open another location” sounds fun until you realize “another location” can easily be a seven figure project.
You absorb all the risk
Bad economy? Slow quarter? Pandemic? If you own the stores, you feel it directly. Franchise heavy systems spread that risk across lots of independent owners. Company owned chains carry the full weight themselves.
Management becomes a monster
Managing a few hundred employees is one thing. Managing thousands is a whole different life choice. At a certain size, “hands on” becomes “hands full,” and then becomes “someone please invent cloning.”
The compromise: mixed models (because sometimes you want control and sleep)
Some chains live in the middle. They might keep key markets company owned (where the brand experience matters most) and franchise other regions, or use licensing for non-traditional locations.
Panera has famously operated with a mix of corporate and franchised locations. McDonald’s is heavily franchised, but it has also bought back some locations in certain situations to regain more control.
It’s basically the chain saying: “I want to scale, but I don’t want my brand to turn into a weird game of telephone.”
The bottom line (aka: why your meal is caught in the middle of all this)
Chains that refuse to franchise (or only do it sparingly) usually care about some combo of:
- tighter quality control
- faster operational changes
- keeping more profit per store
- protecting company culture
The trade off is slower growth, higher risk, and bigger headaches.
So the next time you’re biting into a burger that tastes exactly the way you wanted it to, you can quietly thank the ownership structure… and the army of people behind it who made “consistent” happen on a random Tuesday at 2 p.m.
And if your fries taste weird? Well. Now you know where to aim your side eye.
Note: Store counts, timelines, ownership mixes, and financial figures vary by year and source. Consider any numbers here as approximate.
