What the research suggests
Jay Galbraith’s research on organisation design, published in Interfaces, frames the central challenge of a growing organisation as an information-processing problem: as uncertainty and coordination demand rise, the organisation needs either to reduce how much information it has to process, or to build the capacity to process more of it. A franchise network growing in site count is, in Galbraith’s terms, taking on more uncertainty and more coordination points with every location added — different local conditions, different operators, different competitive contexts — whether or not anyone at head office has deliberately decided to take on that additional load.
Donald Sull, Rebecca Homkes and Charles Sull’s multi-year study of more than 250 companies, published in Harvard Business Review, adds a specific and counterintuitive finding relevant here: the central execution problem most organisations face is not unclear direction from leadership, which their research found was generally sound, but cross-unit coordination — only 9% of managers said they could rely on colleagues in other functions and units all of the time to deliver what was expected. For a franchise network, this reframes what “asking the right questions” should actually be checking. The risk is rarely that franchisees do not understand what the network wants. It is that the network does not reliably know what is actually happening at the site level, because the coordination mechanisms built for ten locations were never redesigned for fifty.
Why the same questions become structural, not optional
At small scale, a franchisor can substitute personal relationships and direct observation for formal coordination mechanisms. The founder or a small central team knows most franchisees personally, visits most sites regularly, and picks up on problems through informal channels before they become visible in any report. This works well and is often genuinely efficient — building formal systems too early, for a network too small to need them, wastes effort the organisation could spend elsewhere.
The difficulty is that this informal substitute does not degrade gradually as the network grows. It tends to hold reasonably well up to a certain size and then fail relatively quickly once the number of relationships a single central team can maintain personally is exceeded. Nelson Repenning and John Sterman’s MIT Sloan research on the capability trap, published in California Management Review, describes a related pattern: organisations under pressure default to working harder within their existing approach rather than investing in a different one, because the people who would build new capability are the same people needed to keep the current approach running. A growing franchise network relying on informal, relationship-based coordination is especially exposed to this — the busier the central team becomes managing more sites the old way, the less capacity remains to build the formal systems that would actually reduce that burden.
This is why questions that felt genuinely optional early on — how does the network verify what a site visit reports, how quickly does a problem at one location become visible centrally, what happens to feedback that a site manager raises — stop being optional as the network scales. They were never irrelevant; they were simply being answered, adequately, by informal means that quietly stop working somewhere along the growth curve, usually without anyone deciding that they should stop.
The questions, and what each is testing
A useful starting set, organised around what each question is actually probing rather than the specific answer it produces:
Does the network know what is happening at a site between scheduled reviews, or only what the review itself surfaces? This tests whether oversight depends on a periodic snapshot or a more continuous signal — the difference matters because problems that develop gradually are the ones a snapshot is least likely to catch.
When a franchisee raises a concern, what happens to it, and would the franchisee agree with that description? This tests whether feedback genuinely travels upward or whether it is absorbed locally by whoever receives it first — a gap between the official process and what franchisees actually experience is itself informative.
Which parts of the operating model have never been questioned because they have always worked? This tests for embedded assumptions rather than known weaknesses, since the assumptions nobody has examined are, by definition, the ones most likely to be wrong in conditions the model has not yet encountered.
Is performance variation across sites being tracked at a level of detail that would reveal a pattern, or only at the level of a network-wide average? This tests whether the network could actually detect a group of sites moving together before the aggregate figure moved enough to notice.
Would the organisation know if a franchisee stopped fully following the operating model, and how long would that take? This tests the speed and reliability of the coordination mechanism itself, independent of any specific issue currently in front of the network.
None of these questions has a single correct answer that applies to every network. What they share is that the honest answer requires the organisation to look at its own coordinating structures directly, rather than at the outputs those structures happen to be producing right now.
It is worth adding a final, harder question underneath the practical list above: who inside the organisation is actually positioned to answer these honestly? A regional manager close to day-to-day operations may see gaps that never reach a head-office dashboard. A franchisee may have a clear view of how feedback is handled that head office does not share, precisely because they are the one sending it. Asking the same question of people at different points in the network, and comparing the answers rather than averaging them, often reveals more than asking it once at the top and treating the response as representative of the whole.
Where this shows up
This perspective is written with franchise networks in mind. It sits within the Multi-Site and Franchise grouping, and the questions it raises recur in other sectors too.
Questions worth considering
- Which of these questions would different people inside the same organisation answer differently — and what does that disagreement itself suggest?
- Has the network’s coordination approach been deliberately redesigned as it has grown, or has it simply carried forward from an earlier, smaller stage?
- If a genuinely serious issue were developing quietly at one site right now, how would the organisation actually find out?
Your team is facing similar challenges?
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