Franchising

When and why to say ‘no’ in franchise development

The strongest franchise brands know that sustainable growth isn't about saying yes to every deal—it's about knowing when to say no. Marco's Pizza prioritizes market capacity, real estate analytics, franchisee readiness and cultural fit to avoid oversaturation and set operators up for long-term success.

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September 9, 2026 | By Gerardo Flores, Chief Development Officer, Marco's Pizza

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Many franchises are quick to market the number of units they are opening. Fewer are willing to talk about the deals they say no to, and why.

Overexpansion and oversaturation are crippling issues in the industry. Marco's Pizza has grown to more than 1,200 locations, with additional store openings on the horizon through the end of 2026. But the number I always pay closest attention to isn't on the growth chart. It's the number of qualified-looking deals we say no to every year. This is because I've learned that discipline, not velocity, is the real differentiator for a development strategy built to last.

Here are a few key considerations as to when and why it's time to say no in franchise development.

1. "No" is a strategy, not a delay. Over the years, I have built out a strategy for evaluating locations, deals and prospective franchisees. As we've scaled, I've held our red flags firm, and they've become non-negotiable deal-breakers.

Beyond simply screening for financial readiness, we also determine whether the prospective franchisee has the operational bandwidth to successfully run one or multiple units. We need to know that a franchisee will add to the culture of Marco's and understand our values well enough to guide day-to-day operations. These requirements aren't just checkboxes on a rubric; they reflect judgment calls built on what separates thriving franchisees from those who struggle.

This is what responsible franchising is all about.

2. Get informed on markets before signing. The most consequential mistake in franchise development is failing to be informed on saturation risk. Before committing to a new development agreement, it is vital to evaluate how much room a market truly has for a new location rather than relying on how much demand a candidate believes exists. At Marco's, we map out the country into defined areas and determine store capacity market by market before we recruit franchise owners in those areas. Therefore, the conversation with a candidate starts from data confirming the market can fully support a new store, rather than enthusiasm. There might be pressure to move fast, but it's important to slow down and get through this crucial step first.

3. Real estate perspective from experience. My experience in site selection spans over a decade in franchise real estate. That background has made me more conservative than most when it comes to finding the perfect site. Sometimes a location can look ideal in theory, but there needs to be strong analytics that back that up. Those analytics should include traffic patterns, surrounding competitors, households, and community demand for a corporate franchise, among other factors.

4. Be selective while maintaining growth. At Marco's, we pride ourselves on making informed decisions with a keen focus on deliberately growing with the right partners. Our Franchise Development Royalty Incentive Program strengthens that strategy as it's designed to lower the barrier to entry for qualified operators without lowering our standards. It supports franchisees by reducing the cost and stress of entering the franchise system. Being selective and striving to grow aren't in conflict. When they work together, there is a greater chance to scale with a lasting impact.

5. Measuring success differently to play the long game. Though the number of signed agreements is important, what matters even more is the number of successful operators. We want to build a system that will still be healthy five years from now, not just make a big splash from the get-go. The franchise brands that will still be thriving a decade from now won't be the ones that said yes to everyone. They'll be the ones disciplined enough to know when to say no, and clear-eyed enough to know exactly who to say yes to, and why.

That's the playbook we're building at Marco's, one deal at a time, backed by data and evidence.