What to Consider Before Franchising Your Business

Shawarma shop Osmow's is a franchising machine—and one of North America's fastest growing quick-service restaurant chains

In the late ‘90s, Sam Osmow bought a small submarine shop in Streetsville, Ont., called Polar Submarines. Subs weren’t exactly a hot-selling item, so Osmow, an immigrant from Egypt, began adding Mediterranean food to the menu in 2001, a truly original offering in a market teeming with pizza joints and sub shops.

That year, Osmow’s was born: a Mediterranean and Middle Eastern, quick-service restaurant with meals like lamb kebab and mixed grills. “Not a lot of people knew what a shawarma was,” says Ben Osmow, Sam’s son and now-CEO of Osmow’s Inc. As a kid, Ben’s job was handing out free shawarma samples. “My dad believed that if people try it, they will come.” Less traditional names for menu items—like using “Chicken on the Rocks” as the name for chicken shawarma on rice—made the brand more accessible to a Canadian customer base.

Related: How to Attract New Customers to Your Business

Within a year of launching their new menu, the Streetsville shop was so successful that there were routinely two hour line-ups. Customers drove in from surrounding towns, like London and Waterloo, and were constantly asking for new locations in their own cities: “They kept asking us, can you guys please, for the love of God, open up in this city?” says Ben. The demand was there, so Osmow’s took note. 

In 2008, Osmow’s did its first ever franchise deal with family and friends, bringing the total number of shops to three. Five years later, there were around ten restaurants, but customers were still asking for more Osmow’s locations. Ben says bringing on franchisees was mostly trial and error at first, which didn’t exactly work when it came to brand consistency. “Some franchisees had gone a little bit rogue—they were doing things to save money or introducing new menu items,” he says. “We needed to fine tune and make sure we were consistent.”

In 2015, the family decided to look more seriously at franchising. Ben spent hours watching franchise videos online, studying documentaries and downloading booklets from big players, like McDonald’s, Starbucks and Chick-fil-A. He called executives of big franchises like Wendy’s, Tim Hortons and Pizza Pizza and asked if he could take them for lunch to pick their brains. He also got connected with the Canadian Franchise Association and started watching webinars and attending in-person franchisor events. There, he networked, and eventually had contacts who he could call to ask for advice. (For people looking to begin franchising, the CFA is hosting a virtual seminar on October 22nd.)

Sam Osmow (middle) with his children Bernadette Farag (left) and Ben Osmow (right).
Sam Osmow (middle) with his children Bernadette Farag (left) and Ben Osmow (right).(Photography: Osmow’s)

The team drafted a training and development plan and hired district managers to visit all the restaurants and make sure they were identical. Growth ramped up after the plan was put in place: In 2015, Osmow’s opened three new restaurants, bringing the total number of locations to 13. The next year, seven new shops were added, then 15 more in 2017. The company’s biggest growth year was 2019, with 35 new shops opening across Ontario, bringing the total to 85 shops. Ever since, Osmow’s has aimed to add 30 to 40 new stores each year. Now, with 180 locations open and operating today, Ben is the one on the receiving end of those inquisitive phone calls. Despite its growth, Osmow’s Inc. is still a family business: His sister, Bernadette Farag, serves as president and chief marketing officer. 

To those looking to franchise their own businesses, Ben gives this advice: Standardize the training process for consistency and quality control. Hire a trainer—or better yet, do the training yourself—to ensure the program is the exact same for all incoming franchisees. Also, before franchising a business, a proof of concept must be in place, alongside a steady customer base. Keep an eye on the business’s economics, including food costs, labour costs, average sales and same-store sales growth. “People always think they’re ready to franchise, but their sales don’t show it,” says Ben. Although the first Osmow’s restaurant was relatively small, it managed to pump out about $2 million in sales. 

Osmow’s also spends time finding franchisees who are a good fit. The team sets up a meeting with applicants or referrals, but they’re not necessarily looking for resumes filled with franchising experience. The company is happy to train new franchisees the “Osmow’s way,” which means spending time actually working in the restaurant and talking to customers to build connections. In fact, new franchisees have been key to raising the bar by thinking up menu items and proposing new ideas to help grow the brand. (This time, through appropriate channels, not on their own.) “Listen to franchisees,” he says. “They change the game.”

Emily Latimer
Emily Latimer
Emily Latimer is a journalist and fact-checker from Cape Breton Island. She has written for CBC, ELLE Canada, and VICE Canada.