Franchising: the right location alone cannot drive growth

Choosing where to open remains a key decision for a franchise network, but it cannot compensate for a weak business model. That was the message from a discussion between Federfranchising and Doppio Malto at Forum Retail 2026, held on 11 and 12 November at Superstudio Più in Milan. For the franchising community, the issue is relevant both to brands’ expansion plans and to prospective franchisees assessing their options.

The discussion between Federfranchising and Doppio Malto

In the event’s Arena Talk area, Umberto Gonnella, president of Federfranchising, interviewed Massimo Ronco, head of franchise development at Doppio Malto. The discussion focused on the role of location in a network’s growth: a practical concern for anyone deciding where to invest and which format to bring to market.

Held under the patronage of Federfranchising, the franchise network federation affiliated with Italian business association Confesercenti, the event brought together more than 4,000 decision-makers and over 380 speakers. The discussion on site selection therefore formed part of a broader gathering devoted to retail and its transformation.

Gonnella shifted the focus from the address to the viability of the business. In his view, location is an accelerator, not a remedy for structural weaknesses in a format. If the figures do not stack up, a prominent shopfront is not enough to ensure the business remains viable over the long term.

This is an important distinction: recognising the value of a commercial location does not mean expecting it to remedy every weakness in the model. The point raised at the Forum concerned the order in which assessments should be made, even before choosing individual premises.

From premises to business model

For anyone considering a franchise, the message is not to separate the property search from an assessment of the business proposition. The question is not simply whether a street has strong footfall or an address is well known, but whether the format can work under the proposed conditions at that site.

The Milan discussion should not be read as a ranking of shopping centres, shopping streets and other locations. Gonnella’s principle is broader: the quality of the location must be assessed alongside the strength of the financials. An attractive location is one component of the venture, not a guarantee of success in its own right.

In practical terms, this suggests that prospective franchisees should ask how the financial forecasts for the proposed premises have been prepared. Occupancy costs, staffing arrangements and expected revenue should be examined together, without treating an area’s reputation as an automatic predictor of success. This is a basis for due diligence, not a promise of profitability.

Growth in value, not just in outlet numbers

The L’Express Franchise article covering the discussion also presents some national figures. In 2025, Italian franchising turnover reached approximately €39 billion, an increase of 8% on 2024. In the same year, the number of outlets fell by 1% to 62,449.

Together, these indicators show an increase in total turnover alongside a slight reduction in the physical network. On their own, they cannot establish how profitable an individual outlet is, nor can they attribute the result to location choices. They do, however, provide useful context: turnover growth does not necessarily go hand in hand with an increase in the number of openings.

For the franchising community, this distinction helps put expansion plans under closer scrutiny. The number of outlets indicates the size of a network, but does not provide a complete picture of its financial resilience.

What to check before choosing a site

The practical value of the Forum Retail discussion lies in linking two decisions that are often presented separately: joining a brand and choosing premises. For a prospective franchisee, the property should be assessed as part of the franchise proposition, rather than as an opportunity that can justify the investment on its own.

Before making any commitments, it is worth asking which assumptions underpin the site’s business plan and what level of performance would be needed to cover its costs. The distinction between actual historical data and forecasts also deserves attention.

Practical takeaway: before choosing a location, check with the brand and an independent adviser whether the business model remains viable under the specific conditions of the premises. A good address can support a sound business proposition, but it cannot replace one.