When I became the first franchisee of ImageFIRST, I was stepping into uncharted territory. No franchise track record. No validation calls. No roadmap from others who had gone before me. All this, and this was my first business venture. It’s a good thing I didn’t know better.
But I also had opportunities no one else would ever have.
🔹 I had direct access to the founders and helped shape the system.
🔹 I negotiated advantages that later franchisees wouldn’t get.
🔹 I secured my prime territory before it was gone.
Would I do it again? In a New York minute.
If you’re considering a new franchise (under 20 units), here’s what you need to know.
Why Franchisees Look at Emerging Brands
For most franchise buyers, the first choice is a mature brand with 100+ locations. But available territories are shrinking in those systems, and costs can be higher.
That’s why some turn to emerging franchises. The appeal?
✅ Wider variety territory availability. The best locations are taken in a mature system.
✅ Potentially lower entry costs. Some emerging brands offer incentives to early franchisees.
✅ More influence on the system. Early franchisees help shape operations, marketing, and support while the new franchisor figures it out.
✅ Bigger potential upside. If the brand grows, early owners often see the highest return.
But emerging brands also come with unique risks.
The 3 Big Risks of Emerging Franchises
- No Validation from Existing Franchisees
With a mature franchise, you can call 20+ franchise owners (although I suggest no more than 5) to ask about profitability, operations, and franchisor support.
With an emerging brand? That data doesn’t exist yet.
How to Reduce Risk:
✅ Ask to speak with corporate-run locations and compare financials to similar industries.
✅ Research the founder’s business experience. Are they an expert in their field AND have franchising experts on staff?
✅ Look at how the first 5-10 franchisees are performing (if they exist).
- Systems Are Still Developing
Mature franchises have tested, refined, and proven their operations over years of iteration.
Emerging brands are still figuring things out. That means you might face:
⚠️ Gaps in training and support.
⚠️ Marketing strategies being built.
⚠️ Operational challenges as the brand scales.
How to Reduce Risk:
✅ Ask for clarity on training, field support, and ongoing development.
✅ Determine what’s missing and find outside resources to fill the gap.
✅ Look at the leadership team’s experience. Do they understand franchising, or are they just great at their core business?
- Brand Recognition Is Still Growing
A mature franchise benefits from name recognition. Customers know and trust the brand.
With an emerging franchise, you carry more of the marketing burden. You’re helping the brand build awareness, which can mean higher local marketing costs and more direct sales efforts.
How to Reduce Risk:
✅ Ask about the franchisor’s local marketing strategy. They’re not big enough for national marketing yet. Do they have a strong digital presence? A proven advertising plan?
✅ Understand your role in local marketing. Some brands provide strong marketing support, while others expect franchisees to drive local traffic independently.
✅ Assess your ability to network. Emerging franchisees benefit from strong local connections.
Would I Do It Again? Absolutely, Here’s Why
Despite the risks, being the first franchisee of a system gave me advantages that later franchisees wouldn’t have.
🔹 I had the franchisor’s full attention. The first franchisees receive the most direct support because the system is still small and mutual success is vital.
🔹 I helped shape the brand’s operations. The best emerging franchisors listen to early owners’ feedback to refine processes.
🔹 I secured prime territory before others could. In mature brands, the best territories are already gone.
The key? Understanding the risks, negotiating the right agreements, and ensuring the franchisor has a path for growth. Find a seasoned franchise master to help your assessment.
And, if you’re wondering, ImageFIRST – Cincinnati grew to $2.5M annual revenue when I sold it to the franchisor 20 years later.
How This Also Applies to Emerging Franchisors
For franchisors reading this, your early franchisees determine your future success.
🔹 How can you provide validation and support to attract the right early owners?
🔹 Have you built strong systems before expanding?
🔹 Do you have a clear plan for scaling and supporting franchise growth in addition to your core business? Consider the benefits of adding experienced franchise experts to your team on a fractional basis.
Your first 5-10 franchisees set the tone for whether your brand thrives or struggles to scale. Choose wisely.
Eighty percent of franchisors do NOT reach 50 units in 10 years, and quietly fade away. What steps are you taking to be in the successful 20%?
What’s Your Next Move?
Investing in an emerging franchise is not for everyone, but for the right franchisee, it can be the opportunity of a lifetime.
I help my clients vet franchise opportunities to maximize upside and minimize risk.
Luke Frey: Franchise Leadership Expert and Author
Luke Frey is a seasoned franchise strategist with over two decades of experience in leadership and business development. His journey from the front lines as a fire chief to the helm of his own successful franchise has equipped him with unique insights into the challenges and triumphs of franchise ownership. As the author of Your Guide to 90-Day Success: The Franchisee’s Strategy for Early Wins, Luke empowers franchisees to achieve early wins and sustainable growth by shortening the steep learning curve of business ownership.
Passionate about helping others succeed, Luke offers actionable strategies that blend practical business acumen with a deep understanding of human dynamics. Through his work, he’s committed to shaping the future of franchising, one successful business at a time.