Growing a Franchise
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Predictable franchise growth starts by reverse engineering the math: how many units you want to award, what it costs to acquire the right franchisee and what that relationship is worth.
How much should a franchise brand spend on marketing in 2027?
$5,000 a month? $10,000? A percentage of gross revenue? A target cost-per-acquision??
For many franchisors, leadership develops an annual financial plan, allocates monthly budgets by dividing equally throughout the year, and directs marketing to generate as many leads as possible while staying within budget..
When the budget is determined before the brand establishes what it actually costs to acquire a franchisee, marketing and development teams can end up working toward the wrong goals. Generating leads becomes the priority, even when those leads aren't producing qualified candidates or franchise awards.
Mainland* recommends working backward from the brand's franchise growth goals. By calculating acquisition costs and determining how many units they want to award, franchisors are able to set strategic budgets that combine capital and operational resources more directly aligned with the organization’s goals. That means looking beyond cost per lead and measuring how many franchise awards the investment produces.
"Most franchisors cap their monthly spend, chase low-cost portal leads and wonder why their sales pipeline stalls out by Q3," said Liz Le Sbertoli, vice president at Mainland, a franchise-focused growth agency. "To really win at predictable growth in 2027 and beyond, franchisors need to abandon the idea of allocating a marketing budget based on hypothetical numbers and what feels like a comfortable financial investment."
One of the biggest mistakes franchisors make when planning their marketing budgets is treating franchise development as a fixed operating expense rather than an investment tied to measurable growth.
A franchisor spending $10,000 a month on marketing might prioritize channels that bring in the most leads for the money. That could mean turning to a franchise portal offering leads at $30 each to keep cost per lead (CPL) low.
"Sure, low CPL looks good on paper. But a pile of low-tier, completely unqualified leads burns out FD resources and hinders growth," Le Sbertoli said. “Prioritizing lead volume over candidate fit drives up the true cost per qualified candidate The focus should be on actual candidate fit than lead volume.”
Meanwhile, the franchisor may be overlooking more expensive channels that attract experienced multi-unit operators and high-net-worth investors.
Mainland addresses that problem through its Conveyor Belt approach, connecting strategy, content, PR, digital marketing and analytics around shared development goals. Instead of measuring each team's success independently, the system focuses on attracting qualified candidates and converting them into franchise owners. Teams can then evaluate their results based on qualified candidates and awards rather than individual performance metrics.
That means measuring cost per qualified candidate (CPQC) and cost per award alongside CPL, giving franchisors a clearer picture of what their marketing investment is actually producing.
Rather than selecting an arbitrary monthly marketing allowance, Mainland recommends starting with the number of franchise units the brand realistically wants to award in 2027. From there, franchisors can calculate their cost per award and consider the long-term financial value of each new franchisee to the system.
For example, imagine a franchise brand wants to award 10 new units in 2027 and determines that its realistic marketing cost per awarded unit is $25,000. That means the brand should plan for approximately $250,000 in franchise development marketing investment.
If its initial franchise fee is between $35,000 and $50,000, that fee could recover the marketing acquisition cost, leaving the franchisor with the opportunity to generate ongoing royalty revenue over the life of the relationship. Of course, training, onboarding and other franchisor expenses must also be considered when evaluating profitability.
"The franchise development marketing budget shouldn't be treated as an operational expense. It's a self-funding growth engine," Le Sbertoli said. “Franchisors should benchmark their true cost per award and look at initial franchise fees as an opportunity to recover acquisition costs before a single royalty dollar comes in.”
Le Sbertoli also recommends increasing spending on localized marketing campaigns as deals close, helping franchisors build momentum in those regions over the following 12 months. Instead of resetting their development strategy every January, they can use successful acquisitions to help fund future growth.
Pigtails & Crewcuts offers an example of how focusing on qualified candidates can improve franchise development results. For the children's hair salon franchise, Mainland concentrated on improving conversion rather than simply generating more leads.
By Q3 2026, Pigtails & Crewcuts had decreased its cost per qualified candidate to $1,009. That’s a 62% drop from Q1. The brand also awarded 6 franchise units at an average acquisition cost of $9,086 per unit.
"Stop managing the cost per lead and start budgeting to win," Le Sbertoli said. “A $300 lead that converts into a three-unit deal is vastly cheaper than 50 $20 unqualified leads that don't convert.”
The results show why cost per lead tells only part of the story. A channel that generates fewer leads may still be worth the investment if those candidates are more likely to qualify and ultimately become franchise owners. For franchisors planning their 2027 budgets, that distinction matters more than the number of inquiries a campaign produces.
An established franchise system with a proven conversion history will have different acquisition economics than an emerging franchisor awarding its first few units. That's why a universal monthly spending recommendation misses the point.
Once franchisors establish a budget based on development goals, they can monitor qualified candidates and awards to determine where additional investment makes sense. As conversion data improves, they can make those decisions with greater confidence.
So, how much should your franchise brand spend on marketing in 2027?
Stop working with a hypothetical number. Start with what it costs to acquire the right franchisee, what that relationship is worth and how many units you want to award.
Then build your marketing investment around winning.
To learn more about how Mainland connects strategy, content, PR, digital and analytics to franchise growth, visit https://hellomainland.com/.
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