Tighter Capital Is Rewriting the Franchise Candidate Pool
Lending constraints are filtering out first-time candidates, pushing franchisors to compete for a smaller pool of experienced, multi-unit operators.
By pairing a 50-unit development agreement with president and COO titles, Dog Haus is testing a model where franchisee investment and brand leadership are the same role.
Dog Haus announced in April that it would recruit experienced franchise operators from other brands as unit owners who would simultaneously take on leadership roles within the company. The first execution of that model closed in late May, when Chris Rigassio and Garen Khodaverdian, who together operate more than 100 restaurants including Jersey Mike's and Wingstop locations, signed a 50-unit development agreement. Rigassio became Dog Haus president; Khodaverdian became chief operating officer.
Dog Haus has about 50 locations operating today against a stated goal of 1,500. The model pairs capital commitment with operational authority in the same people, on the theory that executives with direct financial exposure to unit performance are more likely to push for decisions that support franchisee economics rather than just corporate revenue. For a brand at 50 units trying to scale by a factor of 30, having leadership that has built multi-unit systems elsewhere compresses the learning curve without requiring the brand to hire blind on executive experience.
Rigassio and Khodaverdian started as part-time employees at Jersey Mike's and built to a 100-plus-unit multi-brand operation. For operators at that scale, a C-suite role at a growing franchise offers something a pure development agreement does not: the ability to shape the system from the top rather than executing within it. The structure also gives them direct authority over franchisee support standards, which matters considerably when they are simultaneously developing 50 units themselves.
The model works when growth stays on track. If unit economics underperform or the 1,500-unit plan slows, Rigassio and Khodaverdian hold both a development obligation and a leadership role at a brand under pressure. How their franchise agreements handle a scenario where the franchisor's own executives are also among its largest franchisees, including potential conflicts in support allocation or royalty negotiations, is not yet tested at any real scale in the industry.
Lending constraints are filtering out first-time candidates, pushing franchisors to compete for a smaller pool of experienced, multi-unit operators.
Rising lending standards have narrowed the franchisee pipeline to experienced operators, leaving franchisors to compete harder for a smaller, more discerning pool.
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