In this solo advisory video, Evan Carmichael addresses a common dilemma for entrepreneurs seeking to scale without sufficient capital: whether to expand through franchising or by bringing on investors. He frames the discussion around a specific query from a Facebook reader, John, a 52‑year‑old pizzeria owner in New Jersey who wants to take his concept nationwide but lacks funding. Carmichael explains that franchising requires a proven, repeatable system that can be demonstrated in the original store before selling rights and training to independent operators. He contrasts this with the investor/owner‑operated route, where the founder retains ownership of each location but must raise capital, find compatible partners, and accept slower, one‑store‑at‑a‑time growth. Using Starbucks (owner‑operated) and McDonald’s (franchise) as illustrative extremes, he highlights how each model shapes daily responsibilities—franchisees demand the founder’s focus on recruiting, training, and supporting partners, whereas an investor model keeps the founder more customer‑facing. He then outlines three decision criteria: (1) the type of business and whether the founder prefers working with franchisees or customers, (2) the desired speed of expansion, and (3) the founder’s willingness to share ownership and collaborate with partners. The video concludes with encouragement to apply these criteria, share progress, and engage with the channel.
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Should you franchise or get investors? This is a common question I get asked by entrepreneurs who are trying to expand, right? You've, you've built your business up to a certain degree and now you want to expand it and you need help and you don't have the capital to do it. So you're looking at either franchising it out, and that's where you own all of your business but you are selling the rights and the training and the system to other people, or you bring on investors to help you grow this business up. I'm gonna answer this question with context from one of my Facebook readers— love you guys— John, who wrote in. John has been an entrepreneur for 25 years. John's based in New Jersey, he's 52 years old, he's got a pizzeria. He says he's got this new idea to expand his pizzeria into new niches that nobody else has done before. And he wants to go big, he wants to take it nationwide, he doesn't have the capital to do it. He hasn't launched it yet because he doesn't want people to steal his ideas, because he's only a one-man show, and he doesn't know which way to go. He's talking to investors, but he's not sure if he should do investors or if he should go the franchising route. So let me answer this with that context, okay? John, first of all, to franchise, you have to have something that works. People buy into a system. So I don't know how well your pizzeria is doing right now, but you are basically selling this concept. This new concept, for it to work, you have to show that your system works. You've got to launch it in your store and show that it has proven results because you have to be the best store. People are going to come to you for training. If you haven't launched it yet and you don't know how it works and you don't know what the numbers are, people can't buy into that, right? You have projections, but that doesn't mean anything. The best and most successful franchises are the ones who have a— with high degree of certainty, here's how much money you're going to make in this location. Franchising is typically the faster way to grow. You want to take this big, you want to take this nationwide, franchising lets you get there because people are paying you for the rights to open up locations. You own complete control of your business, but you have all these kind of independent people who are around, around the country running this. It's fast because they're paying into it. If you go owner-operated and you get investors involved, You have more say because you actually own each store, but you have the challenge of bringing on partners who you now have to work with instead of you owning everything. And you have the challenge of slower growth because you have to open one store at a time. Now both methods can work. If you look at two of the biggest systems in the world, you've got Starbucks and McDonald's. Where Starbucks, everything is run by the store. You can't buy a Starbucks franchise. And McDonald's is the opposite. They're all franchise. They have, they have their training University, you learn about making hamburgers and running a restaurant, but it's all franchisees. So it comes down to, one, what kind of business do you want to run? Because I've had a lot of successful entrepreneur friends of mine who have gone the franchising route, and your business now becomes working with franchisees and training them instead of working with the customer. So most of your time is spent talking to your franchisees and recruiting them and training them. And a lot of the entrepreneurs have gone down that road, they don't like it. They want to be customer-facing. So is that the kind of business that you want to run or not? Okay, second, how fast do you want to grow? Because if you want to get this going quicker, franchising will get you there faster because you don't need as much of your own capital from investors and from yourself. People will supply the capital. You have to show you have a working model, and people will supply the capital. The third one is Do you want to work with investors or not? Do you want to have partners on board? You know, you don't know— I don't know how much you're asking for. I don't know how much they're going to take as a percentage of your business, but, you know, can you work with a business partner? Do you want that or not? So both models can work. Hopefully I've helped give you a little bit of clarity. It comes down to what kind of business do you want to run and how athlete you want to grow, that will help decide which model to take. Good luck and believe, and keep me posted with your progress. For those of you watching, like the video, please give it a thumbs up below, leave a comment, I'll make a video response. Subscribe to the channel if you like what you're seeing, and I'll see you soon.
