When Big Franchisees Fail: Why Financial Oversight is Now a Franchisor Problem.

Accent Group is spending $50 million to buy back the last 30 franchised stores of The Athlete’s Foot.

It’s a move that highlights an uncomfortable commercial reality: for highly profitable, mature brands, franchisees eventually become an expensive way to run a store.

Accent expects these buybacks to deliver roughly $14 million in incremental EBIT by 2030. They aren’t guessing—their historical returns on franchise re-acquisitions are running at around 20 per cent.

When a brand is in its “dash for cash” growth phase, franchising is a brilliant capital-light expansion strategy. Franchisees take the lease risk, fund the fit-out, and drive local engagement while the franchisor focuses on the brand.

But when a brand reaches the scale of Accent Group—targeting $1.9 billion in sales by 2030—the math changes. The margin given away to a franchisee is suddenly margin the corporate group wants back on its own balance sheet.

It forces a strategic question for every franchisor: are you building a network to support franchisees for the long haul, or are you using franchisee capital to build a footprint you intend to eventually own?

Neither is inherently wrong, but the legal and operational structures required for each are entirely different. If your end game is corporate consolidation, your franchise agreements, lease structures, and exit clauses need to reflect that from day one.

If you haven’t reviewed your buyback or “right of first refusal” clauses lately, you might find your path to consolidation is more expensive than it needs to be.