Franchising: how to test your business model before recruiting franchisees

A business that works because its owner is always there is not necessarily ready to be replicated. Before building a franchise network, you need to check that the business model delivers observable results with different people and under different conditions. Testing helps distinguish what can be transferred from what depends on the founder’s personal experience or exceptional circumstances.

What Italian law requires

In Italy, franchising is governed by Law No. 129 of 6 May 2004. Article 3(2) states that, to establish a franchise network, the franchisor must have tested its business model on the market.

The current provision does not specify a minimum number of pilot units or a minimum testing period. Fixed rules such as ‘one compulsory year’ or ‘at least two outlets’ should therefore not be presented as legal requirements. The duration and scope of testing should reflect the characteristics of the business. A seasonal model, for example, requires observations beyond the period of peak demand.

This provision does not require testing to be carried out through pilot franchisees. If you already own a business, your existing outlet can provide a starting point, provided it allows you to observe the model you actually intend to offer.

A financial plan or simulation is no substitute for market testing. They can guide it, but real operating experience is necessary. Before launching the network, it is advisable to ask a qualified professional to assess whether what you have tested is consistent with what you will offer franchisees.

Define exactly what you are testing

The first step is to describe the version of the model being tested. Simply stating the type of shop or service is not enough: you need to clarify which elements will be replicated and which may vary according to local circumstances.

Prepare an initial brief covering:

• the products or services offered and the intended customer base;
• the essential requirements for premises and equipment;
• team structure and required skills;
• opening hours, operating capacity and work organisation;
• procurement arrangements and the support needed;
• any particular circumstances at the location where testing takes place.

The last point is crucial. Owning the premises, exceptionally favourable purchasing terms or a customer base built up by the founder over many years may improve results without being transferable.

Always distinguish the business model from advantages specific to the test location. If you intend to offer franchisees a smaller format or a different range of products or services from the original business, the existing outlet’s track record alone is not enough to demonstrate that the new version works. Material differences need to be tested.

Test the business without the founder’s constant direction

One useful test is to gradually hand day-to-day management over to a trained manager, reducing the owner’s operational involvement. This does not mean abandoning the outlet: it means making clear how much support it genuinely needs to function.

Record every exceptional intervention by the founder, whether securing a delivery, resolving a complex complaint, changing staff rotas or closing a difficult sale. For each one, note the reason, the time spent and whether the skills involved can be passed on.

If the same difficulty recurs, consider whether it stems from insufficient instructions, inadequate tools or a personal skill that has not yet been transferred. Repeat the test after making improvements, rather than treating the problem as solved simply because the owner stepped in successfully.

Observe ordinary working days as well as busy periods and staff absences. Do not create situations that put customers or workers at risk: use real events, and conduct any simulations only under controlled conditions.

The aim is not to eliminate every request for help, but to distinguish sustainable support from permanent dependence on the founder.

Gather evidence and decide whether to proceed

Before testing begins, establish which indicators will guide your decision. Alongside sales and margins, consider service times, errors, waste, complaints, hours worked and requests for assistance. Choose indicators relevant to your business, using consistent definitions and verifiable data.

Keep a testing file documenting the period observed, the outlet’s characteristics, the version of the model tested, supporting records, anomalies and changes introduced. If you change the offering or the way work is organised, separate the results before and after the change: combining them without explanation can conceal significant weaknesses.

At the end, formally record one of the following decisions:

• Proceed: the model can be transferred under clearly defined conditions.
• Continue testing: specific questions remain, with further checks and responsibilities clearly assigned.
• Revise the model: the business still depends on conditions that are difficult to reproduce.

A positive outcome does not guarantee franchisees’ future results. It provides a basis for an offer grounded in practical experience, while making its limitations and the conditions under which it applies explicit.

In practice: before seeking franchisees, define the model, test it without constant intervention from the founder and retain the evidence. If you cannot explain what makes the results replicable, testing needs to continue.