Growing a Franchise
Learn how emerging franchisors like The Shutter House set realistic unit goals for 2026 by aligning category, capital reserves, and operational capacity must align with growth targets.
Every emerging franchisor faces the same early question: How many units should we expect to award this year? The instinct is almost always the same: Set an ambitious target, push hard and assume the market will respond. But as founders quickly discover, unit goals are not simply sales goals.
Few founders explain this tension more honestly than Edward Terry, CEO and founder of The Shutter House, a young franchise brand that has grown steadily, but only after learning what “realistic” actually means.
“When you are just starting out, it's tough to know about growth goals,” Terry said. “The biggest challenge you have when you first start out is that nobody knows who you are. You don’t really have the ability to have validators, which are very important in selling franchises. We just started out two years ago — everywhere we went and everyone we talked to, they loved the concept, but it was especially hard to sell because you didn’t have a proven track record with active franchisees.”
Those first two years taught Terry what many emerging franchisors eventually realize: Growth is as much a function of timing and support structure as it is of demand.
When Terry launched The Shutter House, he projected what many founders project — a clean, round number that sounded ambitious but achievable.
“I set out the first year and thought we would have 10 locations the first year,” he said. “But at the end of the first year, we only had four, and two of those were corporate locations.”
This mismatch isn’t a failure. It’s data on how your brand's narrative resonates with potential franchisees, the perception of your operational infrastructure by industry brokers, your category's performance metrics with buyers new to franchising, areas where your value proposition needs to be articulated more forcefully and a realistic timeframe for establishing credibility when third-party validation is absent.
“The second year, I projected that we would have 15 to 20 locations,” said Terry. “We have 17 locations right now at the end of year two. So those goals worked pretty well.”
Emerging brands often think the first year is the rocket-launch moment. In reality, for most categories, it’s the calibration year — the time when the brand learns what the market will absorb and what must be true to accelerate.
There’s a reason some brands explode and others grow at a careful pace: categories behave differently.
“The category is important as well,” Terry said. “We are kind of unique in our franchise because we are the only ones in our space. We do exterior window treatments. There is no other franchise brand that focuses on that product. We are in a space of our own, so it’s a little bit easier for us than it would be if we were just a painting franchise.”
The nature of a franchise category fundamentally shapes its sales cycle and target-setting. Novel categories may sell earlier, even without extensive validation, while crowded categories require more substantial proof of concept.
And the required capital investment plays a critical role. High-investment franchises naturally close slower and demand more focused nurturing throughout the sales process. Conversely, low-investment opportunities can attract high volume but often yield a lower quality pool of prospective franchisees.
In other words, if your competitors have five-year head starts and massive validation, your first-year projections can’t mirror theirs. If you’re alone in your category, you may win interest sooner — but you still need the support structure to deliver.
One of the most important decisions Terry made was knowing when to hit pause. “We listened to the brokers and the franchise development consultants and we froze franchise development because we saw that we were about to have too many to support,” he said.
This is a discipline most young brands struggle with. Selling 20 deals means nothing if you can’t train them, launch them, support them and protect validation. Weak early support is the fastest way to destroy momentum and stall future pipelines.
“We took time to onboard and train those locations,” Terry said. “We’ve now done that. We are about to start back and projecting we are about to expand to around 30 locations next year.”
This is what responsible scaling looks like. Growth isn’t linear — it’s staged. Some years are for selling. Some years are for building the machine that allows you to sell more.
Terry is equally direct about the financial reality behind every franchise development plan.
“Franchising is very expensive. There are a lot of upfront costs,” Terry said. “It seems to take around $30,000 to find a candidate.”
Emerging franchisors frequently underestimate the full scope of financial commitments involved in franchise development. These costs include fees paid to a Franchise Sales Organization (FSO), broker commissions, digital advertising expenditures, the expense of optimizing the development page, necessary legal fees, the costs associated with initial training and onboarding for new owners, and so on.
“As a rule of thumb, most of the franchise fee is going to go towards finding that candidate,” Terry said. “You still have to train them, you still have legal expenses. As a franchisor, you really don’t start generating any revenue until they start selling.”
This is why unrealistic unit goals become dangerous. Selling 20 deals sounds exciting — until you calculate that it may cost $600,000 in acquisition spend to get them.
Your unit goal must match:
Anything else is a fantasy.
Want to learn more about how 1851 helps franchisors grow their franchises with confidence? Visit www.1851growthclub.com and see what we can do for you.
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