By Mike Johnston
For decades, franchising has operated on a fairly straightforward premise – consistency creates scale. The franchisor owns the brand, controls the marketing, centralizes the systems and operators execute a proven model in local markets. That structure helped build some of the most recognizable businesses in the world.
But modern consumer behavior is beginning to expose cracks in that model. Today’s customers move fluidly between digital and physical channels. They discover brands on Instagram and TikTok, order through apps, buy online, shop locally and increasingly expect businesses to feel personal and community-rooted, even when they’re part of a larger system.
That shift is forcing many franchise systems to confront a difficult question about who actually owns the customer relationship.
In many systems, corporate e-commerce platforms now compete directly with local operators for the same customer. National marketing campaigns can unintentionally pull revenue away from franchisees. Operators are being asked to invest deeply in local relationships while often having limited control over the digital channels where those relationships ultimately convert into sales.
Rethinking Who Owns the Customer Relationship
As omnichannel retail continues to evolve, more franchisors are beginning to reconsider whether highly centralized models still align with how customers actually behave. I’ve spent the last two decades wrestling with that question firsthand.
My wife Janet and I co-founded Savory Spice in 2004. After opening several company-owned stores in Colorado, we expanded through franchising as interest from prospective operators grew organically. For years, we operated under a fairly traditional franchise structure. We built a successful multi-location system with passionate operators and loyal customers.
But over time, slight tensions began surfacing in subtle ways. Our franchisees were the ones building relationships in their communities. They knew their customers by name. They taught cooking classes, answered questions in-store and became trusted local business owners. Yet when those same customers wanted to order online, the transaction often shifted to the corporate website. Even though everyone understood the structure contractually, the incentives gradually became misaligned operationally.
We started hearing more customers say they wanted their purchases to support their local store owner. Operators became increasingly uncomfortable directing shoppers toward a centralized e-commerce platform that they didn’t fully control. At the same time, corporate marketing efforts designed to grow online sales sometimes created friction at the local level, particularly around promotions and discounting.
One of the biggest lessons I’ve learned is that franchising friction often emerges when the party responsible for building the customer relationship is not the same party benefiting most directly from it.
Historically, franchise systems were built for replication efficiency. Centralization made sense because it created operational consistency at scale. But digital retail changes the equation.
The Rise of Operator-First Franchising
Customers no longer experience brands through a single channel. They experience them everywhere at once. As a result, some franchise systems are beginning to explore more operator-first approaches that give local owners greater autonomy over marketing, digital presence, customer engagement and in some cases, e-commerce itself.
This does not mean abandoning standards or weakening the brand. The key is distinguishing between what truly requires central control and what may benefit from local ownership.
For us, that required asking some uncomfortable questions. What actually created value in our system? Was it strict brand uniformity? Or was it product quality, sourcing expertise, operational knowledge and the entrepreneurial energy of local operators?
The answer ultimately led us to redesign our structure. We shifted away from a heavily centralized model and toward a more localized licensing framework that allows operators to run under their own local brand identities while maintaining shared operational standards and product consistency. Operators now control their own local marketing and e-commerce presence, while we continue supporting sourcing, systems, product development and operational infrastructure.
The transition was not about loosening standards. It was about realigning incentives. And while every franchise system is different, I believe there are several lessons franchisors should consider as they evaluate whether their own models need to evolve.
Five Lessons From Navigating Decentralization Firsthand
First, pay attention to where friction repeatedly appears. When operators consistently create workarounds, it often signals a structural issue rather than an operational one. In our case, stores began encouraging customers to order directly through them rather than through the centralized website. That behavior wasn’t rebellion. It was a response to misaligned ownership of the customer relationship.
Second, separate brand consistency from brand control. Many franchisors understandably fear that decentralization will dilute the brand. But customers increasingly value authenticity and local identity. Standardizing product quality and operational expectations is different from standardizing every aspect of local expression.
Third, decentralization only works when trust exists. You cannot simultaneously ask operators to think like entrepreneurs while treating them like branch managers. If franchisors want operators to take greater ownership, they must be willing to relinquish some control and create genuine partnership structures.
Fourth, local execution matters more than ever. Centralized marketing still has an important role, particularly around national awareness and brand storytelling. But operators are often better positioned than corporate teams to understand the nuances of their specific markets.
Finally, evolution should be collaborative, not imposed. One of the most important decisions we made during our transition was making participation optional and involving operators directly in shaping the structure. That process created far greater alignment and buy-in than a top-down mandate ever could have.
Franchising has always evolved alongside consumer behavior. The systems that thrive over the next decade will likely be the ones willing to rethink long-standing assumptions about ownership, control and where value is truly created.
Centralization helped define modern franchising, but the next era may belong to systems that learn how to decentralize strategically without losing what makes them strong in the first place.
Mike Johnston is the co-founder and CEO of Savory Spice, the specialty food company he launched with his wife, Janet, in 2004. What began as a single Denver storefront has grown into a national brand with nearly 20 locations and a thriving e-commerce business. Over the past two decades, Mike has led the company’s growth while overseeing product innovation, brand strategy and the evolution of its retail and franchising model. He is a frequent voice on topics including the future of franchising, omnichannel retail and balancing centralized infrastructure with local operator autonomy.