What to Do When a Franchisee Isn’t Performing: A Tactical Playbook

 If you’re dealing with underperformance in your system right now, don’t wait and hope it fixes itself.

Book your free Franchise Growth Strategy Call at guycoffey.com.

We’ll assess what’s really happening, build a support and accountability plan, and decide the smartest next move to protect your brand and your energy. 

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Every franchisor will face this moment: a franchisee who isn’t performing. Sales stall. Morale drops. Other franchisees start watching closely to see what you’ll do next.

In this solo, tactical episode, I walk through the exact 7-step playbook I use to diagnose underperformance, support franchisees the right way, and protect the brand when tough decisions need to be made. Underperformance is inevitable. What matters is how fast and how intentionally you respond.

Key Takeaways

• Why every franchise system has a bottom 10–20% of performers
• How ignoring underperformance can poison your entire brand
• The 3 E’s framework: effort, execution, or economics
• How to structure a performance improvement plan that actually works
• Why expectations must be objective, time-bound, and documented
• How to balance empathy with brand standards
• When exits, transfers, or closures are the healthiest option
  
  

Time Stamps
00:00 Introduction: The Franchisee Performance Dilemma

00:36 Understanding Underperformance

00:53 The Franchise Scaleup Show: Your Guide to Success

01:24 Episode Overview: Tackling Underperformance

01:56 Reality Check: Accepting Underperformance

02:12 Diagnosis: Identifying the Root Cause

02:42 Support Plan: Building a Path to Improvement

03:28 Setting Clear Expectations

04:00 Accountability with Heart

04:31 Knowing When to Exit

04:54 Mindset Reset: Embracing Tough Decisions

05:11 Tactical Takeaways and Conclusion

Connect with Guy Coffey:
LinkedIn: www.linkedin.com/in/guycoffey
Website: www.guycoffey.com
Instagram: @guycoffey
YouTube: @guycoffey

Transcript

Speaker: 0:00

Here's the problem. Every franchisor dreams of an army of top performers, but the reality, at some point, you'll have a franchisee who isn't hitting the mark. It's frustrating because you sold them the system, you gave them the tools, but the results aren't there. Sales are flat, morale is low, and even worse, other franchisees are watching you. Don't handle it the right way. One struggling location can poison your whole brand. There's a playbook for this. Today, I'll walk you through exactly what to do when a franchisee isn't performing so you can protect your brand, support your franchisee, and keep your system moving forward. Every system has underperformance.

Speaker 2: 0:38

The difference is how you handle them and how fast you act.

Speaker 3: 0:42

If you're an emerging franchise founder, you already know this. The jump from 10 to 100 units is where most brands stall out, not because the concept isn't strong, but because the founder is drowning in chaos. I'm Gee, coffee franchisor, franchisee, and growth strategist. I've been where you are and I know what it takes to build a brand that scales without burning out, selling out, or losing control. That's why I created the Franchise Scaleup Show. Every week I'll share the playbooks, the red flags, and the mindset shifts that separate the brands that stall from the ones that scale. So if you're serious about protecting your vision and multiplying your brand, hit subscribe right now. This is the Franchise Scaleup Show. I'm Gee, coffee. Let's get to work.

Speaker 2: 1:24

Today's episode

Speaker: 1:25

is very tactical. I'm gonna go through seven sections and make recommendations in each one. Section. One is the reality check. Section two is gonna be diagnosis. Section three is build a support plan. Section four is set clear expectations. Section five is accountability with heart. Section six, know when to exit. And section seven a Mindset reset. And then we'll all wrap it up with a few tactical takeaways. So let's go through these. Number one, the reality check. First, realize that even the best brands have a bottom 10 to 20% of performers, no exceptions. The goal isn't perfection. It's protecting the brand while lifting performance. Section two is diagnose first. Find about if it's about the effort, if it's about execution, or if it's about economics. The three E's effort, the franchisee isn't putting in the work. They're not present, they're not engaged. Number two, execution. They're trying, but they're not following the playbook. Number three, economics. The model is broken in that market. The location's wrong. The demographics are wrong, the competition is too strong. Section three is build a support plan. Use a performance improvement plan for underperforming franchisees. Have weekly coaching calls, KPIs. Need to be tracked. Weekly action items need to be agreed to and executed. And then the last thing is document everything.

Speaker 7: 3:03

This is a quick break to thank you for listening. Every week, we are getting more and more people listening to the show, and this growth is helping me to improve it and make it even more helpful to you. My intention for this show is to help more people win in business and life. To that end, I have a favor to ask. If you know of an entrepreneur that would benefit, please hit the share button and shoot them a text with the link back to the show. Make this a great day.

Speaker: 3:28

Section four is set clear expectations. Define what success looks like in black and white. No subjectivity here. Totally objective. Make sure the goals are time-bound. 90 days is typical. That's about the amount of time that a human can kind of really focus on one thing at a time. And then no moving goalposts. Like if you're close but not, not meeting those goals, you don't move it so that the goals are met. Conversely, you don't set the goalposts further out either. Section five is accountability with heart. Empathy. Remember, they invested their life savings in this. They wanna succeed just as much as you do. Standards. You have to have empathy, but the brand has to come first. And there can be no exceptions for that because what's good for the bee is good for the beehive. I think that's the saying. And then encourage coach and push, but don't enable. Failure or lower standards or anything like that. Section six is know when to exit. If performance doesn't improve, sometimes the best outcome is a transfer, a buyback, or a closure. None of those are happy circumstances, but you have to focus on the health of the system. This protects the brand, protects other franchisees, and it also protects your team and your energy. Number seven, the mindset reset. Don't fear the tough calls they're gonna happen. Protecting the system sometimes, meaning letting go of one unit, you're not being harsh, you're being the steward of the brand. So it's, it's tough, but it's necessary. The tactical takeaways here is, remember, every system has under performance. Don't ignore it. Diagnose the issue. Find out if it's effort, execution, or economics. Build a structure performance plan with coaching and accountability. Balance empathy with standards support, but don't enable under performance, and know when to make a tough call to protect the brand. This is a fact of life in every system, so know that it will happen in yours

Speaker 2: 5:42

and be prepared for it. I hope this helps.

Speaker 5: 5:45

That wraps up today's episode of the Franchise Scale Up Show. This gave you a strategy you can put into play. Please share it with one founder who needs the help. You might save them months of pain. If you're ready to go deeper, whether it's building your support infrastructure, accelerating territory sales, or preparing for private equity, go to gee coffee.com. That's G-U-Y-C-O-F-F. EY and book a free franchise growth strategy call. I only partner with founders who are committed to scaling without losing control. If that's you, I'd love to connect. Until next time, protect your vision. Move fast and scale smart. I'm Gee, coffee Talk soon.