When brands remain overly dependent on their founders, South Africa's franchise sector can stunt its growth, according to Larry Hodes, CEO of Grow Franchising and board member of the Franchise Association of South Africa (FASA), who says a simple stress test can reveal whether a business is truly scalable: can it survive 90 days without an owner?
In an interview with CNBC Africa, Hodes argued that if the answer is no, then there is probably a structural problem in the franchise. While many founders create compelling concepts and then move on to franchise them, he said many continue to serve as the central decision-maker even after the brand expands, creating a bottleneck that slows execution, weakens support for stores and ultimately stifles growth.
Hodes said this challenge becomes especially apparent when a franchise network grows beyond a handful of outlets. A single owner may be able to maintain oversight at one location, but that model starts to break down when a brand grows to 10, 15 or 20 stores. At that stage, if every operational issue, strategic decision or exception still requires sign-off from the franchisor, stores are left waiting and the management layers below the founder are often unable to act decisively.
This problem is particularly acute in franchising because franchisees are not just buying a brand name, Hodes said; They are also purchasing a business system. If the promised systems and processes are not strong enough to guide day-to-day operations, franchisees can quickly find themselves stranded when they cannot reach the founder or get clear answers from head office.
“Businesses run on systems,” Hodes said, emphasizing that standard operating procedures, delegation and repeatable processes differentiate a scalable franchise from one still operating on founder instinct and memory.
He said that the benchmark of 90 days is not arbitrary. In the initial weeks of an owner's absence, many businesses may continue to operate on habit, informal knowledge, and routines memorized over time by employees. But cracks begin to emerge around week six, and by day 90, deeper weaknesses in systems, controls and accountability are more likely to appear.
For Hodes, that border also links to a broader structural issue in the region. Citing 2023 industry figures, he said 63% of franchise brands in South Africa had less than 30 stores. He referred to this as the “30-store ceiling”, suggesting that many businesses struggle to cross that level because they have not built the operational backbone necessary for large-scale expansion.
At the root of the problem, he said, is founder psychology as much as business design. Entrepreneurs often struggle with giving up control, especially when they have personally created the concept from scratch. This tendency becomes even more pronounced in franchising, where the founder may feel overly protective of the brand and be reluctant to delegate key responsibilities.
Hodes described this as one of the most common hurdles among businesses preparing to franchise or already operating small franchise networks. Founders may know they need to delegate, but often fail to do it effectively, leaving the organization dependent on their personal judgment rather than institutional systems.
Delaying that change could have serious consequences. In some cases, weak systems only slow down growth, create inconsistency between stores, and reduce customer confidence. In more serious cases, especially in sectors such as food service, operational failures can create reputational crises that affect the entire chain.
Hodes pointed to past examples of food brands that suffered major failures because stores did not follow proper systems and procedures. In a worst-case scenario, entire brands could collapse, he said, resulting in the closure of dozens of outlets. He said franchise risk is collective: Consumers generally don't distinguish between a poorly operated branch and a widespread brand. A bad experience at any one outlet can damage the perception of the entire chain.
That makes brand-wide performance consistency important. A franchisee has a responsibility not only to his own store, but also to every other operator under the same banner, Hodes said. A well-functioning outlet cannot compensate for another outlet that fails in basic standards. Without strong systems, the franchise model loses one of its core promises: consistent customer experience regardless of location.
For franchisors trying to fix the issue, Hodes said the starting point isn't necessarily to document every process at once. Instead, he recommended applying the 80/20 rule: Identify the 20% of systems and processes that account for 80% of day-to-day operations and prioritize them first.
This approach, he said, offers brands a more practical path toward streamlining. Rather than attempting to create a complete, exhaustive operations manual from the beginning, franchisors should first focus on those processes that carry the highest operational load or the greatest risk if handled incorrectly. Once they're in place, they can build the rest over time.
The exact design of those systems will vary by region, he said, with food, automotive and education franchises all requiring different frameworks. But the principle remains the same: A franchise cannot grow sustainably if the founder remains the permanent center for decisions, approvals, and problem-solving.
For South Africa's franchising landscape, the message is clear. Growth doesn't just mean adding stores; It's about building a business that can function predictably, protect the brand and support the franchisee without constant founder interference. In Hodes's view, brands that fail that test may find themselves stuck in the next phase of expansion.
Then again, the 90-day question is less a hypothetical than a strategic diagnosis. If a franchise cannot operate without its owner for three months, it may not be a mature franchise system yet.