Why Franchise Growth Is Becoming More Selective

By Tam Goldsmith

Pokeworks' expansion strategy highlights why disciplined site selection is becoming one of franchising's biggest competitive advantages.

Pokeworks' latest expansion strategy reflects a broader shift in franchising. As customer behaviour evolves and competition for quality sites intensifies, leading brands are becoming far more deliberate about where they choose to grow.

The strongest franchise systems are no longer measuring growth simply by the number of stores they open. Increasingly, they are measuring success by whether every new location strengthens the business for the long term.

Expansion announcements have become one of franchising's most familiar headlines. A brand enters a new market, awards another development agreement or unveils an ambitious growth target, and attention naturally shifts to the number of locations it hopes to open over the next few years.

Those figures matter, but they rarely explain why some franchise systems consistently outperform others.

Long before a lease is signed or construction begins, franchisors make a series of decisions that shape the long-term success of every new location. They decide where to invest, which customers they want to serve and whether a particular site genuinely supports the economics of the business. Those choices rarely generate headlines, yet they often determine whether expansion creates lasting value or simply adds more units to the network.

Ask almost any experienced franchisee about the most expensive mistake a business can make and many will give the same answer. It is not usually the menu, the marketing or even the competition. More often, it is choosing the wrong location. A site can look perfect on paper, offer excellent visibility and still fail because it attracts the wrong customers or does not fit the way people actually use the surrounding area. That reality is encouraging many franchisors to become far more disciplined about where they grow.

Pokeworks provides a timely example. As the fast-casual poke brand continues expanding across Texas, it is targeting mixed-use developments, universities, airports and office campuses rather than relying exclusively on traditional retail sites. Most major Texas franchise territories have already been allocated, leaving Dallas-Fort Worth as one of the few remaining opportunities for new operators. Around 90 per cent of the brand's Texas franchisees are also developing multiple locations, suggesting continued confidence from operators who already understand the business.

What makes that strategy noteworthy is not simply the choice of locations. It is the thinking behind them. Consumers increasingly expect convenient access to healthier meals in places where they already spend their day, whether they are commuting through an airport, working from an office precinct, studying on a university campus or living in mixed-use developments that combine residential, retail and leisure spaces. Rather than asking where retail space is available, Pokeworks appears to be asking where its customers naturally spend their time.

Pokeworks is not alone in thinking this way. Across the restaurant sector, brands are quietly refining their real estate strategies to reflect changing customer behaviour. Sweetgreen has continued expanding into neighbourhoods where residential density, office workers and digital ordering support repeat visits, while CAVA has focused on carefully selected suburban and urban markets that align with its operating model. Although each business follows its own strategy, they share a common philosophy. Sustainable growth depends less on securing the busiest intersection and more on understanding how customers live, work and buy.

For franchisors, that represents a meaningful change in how expansion decisions are made. Site selection teams are doing far more than negotiating leases. They are analysing demographic trends, commuting patterns, residential density and local spending habits to determine whether a location genuinely fits the brand. Technology has made those decisions more sophisticated, but the objective remains remarkably simple. The best sites are those where the operating model naturally fits customer behaviour.

Franchisees are reaching similar conclusions. Highly visible locations often command premium rents, yet visibility alone does not guarantee strong trading performance. A smaller site surrounded by the right customers can outperform a larger property chosen primarily for exposure. Experienced operators understand that one poor location can undermine years of profitable trading, which is why disciplined site selection has become one of the most important commercial decisions they make.

None of this suggests that shopping centres or traditional high streets have lost their relevance. Many franchise systems continue to perform exceptionally well in established retail environments. The difference is that successful brands are becoming much more selective about matching each concept to the environment where it is most likely to succeed rather than applying the same location strategy across every market.

Franchising has always been described as a location business.

Increasingly, it is becoming a customer behaviour business.

The brands that understand that distinction are unlikely to stop expanding. They will simply become much more disciplined about where they choose to grow, and that discipline may prove to be one of the industry's most valuable competitive advantages over the next decade.