Behind the Curtain: Build or Buy? How AI Is Forcing Franchise Brands to Rethink Their Tech Strategy
Behind the Curtain breaks down what’s actually working inside franchise systems, cutting through surface-level best practices to spotlight the strategies brands are using to win right now, pulled directly from our monthly insider newsletter, Franchise Unfiltered. Each edition captures the behind-closed-doors conversations, experiments, and proven tactics shaping real franchise growth before they become industry talking points.
As AI continues to evolve at a rapid pace, the way brands operate has fundamentally changed.
Across the franchise space, leadership teams are asking the same question: Should we build our own technology in-house or partner with a third-party supplier? For most brands, the answer is clearer than it may seem.
The Case for Building In-House Technology
On paper, developing proprietary technology sounds like a strategic advantage.
When a franchisor builds in-house, they control:
The product roadmap
The data infrastructure
The feature set
The long-term innovation cycle
In theory, this allows brands to tailor systems to the exact operational complexities of their model. From territory management to local marketing automation, custom tools can align perfectly with internal workflows.
For enterprise-level franchise systems that are well capitalized, highly scaled, and have proven unit economics, building proprietary technology can create meaningful differentiation.
But that scenario represents a small percentage of the franchise market.
The Reality of Building Tech Inside a Franchise System
Most franchisors are not structured to operate like technology companies.
Building software requires:
Significant upfront capital
Specialized engineering talent
Product management expertise
Ongoing maintenance and iteration
Continuous innovation to stay competitive
And perhaps most importantly, time.
It can take years to fully develop, test, and deploy in-house systems across a franchise network. During that time, market conditions change, competitors evolve, and AI capabilities advance.
The financial and operational risk is substantial. For mid-sized or emerging brands, a failed internal build can slow growth and strain resources that should be focused on franchisee success and expansion.
Why Third-Party Partners Often Win
For the majority of franchise brands, partnering with third-party suppliers is the smarter and more strategic move.
Established franchise technology partners bring:
Proven systems already deployed across multiple brands
Faster implementation timelines
Lower upfront risk
Immediate return on investment
Franchise-specific expertise
These suppliers are battle-tested within multi-unit environments. They understand the operational nuances of franchise systems, from compliance requirements to local marketing execution.
Most importantly, they offer speed to market. In an era where AI tools and automation capabilities are evolving monthly, speed matters more than ever.
What the Winning Brands Are Doing
The brands gaining traction today are not trying to build everything themselves.
Instead, they are:
Identifying best-in-class partners
Integrating technology into their broader strategy
Focusing internal resources on growth, franchisee support, and brand development
In-house technology can be a long-term strategic play. But it only makes sense when two conditions are true:
The technology creates a real competitive advantage that cannot be replicated externally.
The brand has the scale, capital, and infrastructure to sustain ongoing development.
For everyone else, partnership is not a compromise, it’s a growth strategy.
As AI continues reshaping operations, the brands that move fastest and smartest will win. And in most cases, that means building the right ecosystem of partners rather than trying to become a software company overnight.
Want More Insights?
This conversation is just one example of what we share in Franchise Unfiltered, our monthly newsletter for franchisors who want real perspective on what’s changing, what’s working, and what actually matters in franchising right now, including:
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