Skip to Main Content

Retail Brand Expansion

Stepping into the cannabis retail world is no small undertaking; it’s saturated in many areas and underserved in others leaving owners and operators wondering what their best foot forward is, if their retail location is thriving and growing. There is a lot to consider if expansion is on your mind, including being aware of what other competitors are doing and how they are treating expansion.

Evaluate What Works

A great way to audit what is and isn’t working for your brand is to review the strengths, weaknesses, opportunities, and threats (also known as a SWOT analysis). Strengths and weaknesses are internal while opportunities and threats should be reviewed from an external perspective. By zeroing in on what is and isn’t working for your brand, and what opportunities may lie ahead, you can begin to flesh out a strategy for expansion.

Maybe you have strong customer service. How can you replicate that on a larger scale? If you have a strong loyalty program that resonates with consumers, is it scalable? Are you offering niche in-store events or community outreach? All of these can contribute to a single store success but require some forethought to extend to further locations. Maybe it’s a strong, curated selection of products that suits your current geographical area, but another location will require a few months to sort out what the consumers in that location are interested in.


You should also consider exactly what it is you want to accomplish with your expansion. Creating SMART goals will be imperative to the success of your brand expansion.

Specific – Your goals should be sensible, significant, and simple. You do not want to over complicate things and knowing exactly what your strategy is will be useful to keep the expansion within scope.
Measurable – Make goals meaningful, motivating, and of course, memorable. Measurement is critical to show your success in achieving the goal.
Attainable – Expanding to five stores in one year with no funding isn’t going to work, so make sure your goals are achievable based on the resources and timeline.
Relevant – Goals need to be reasonable, realistic, and resourced.
Timely – The most imperative part of any goal is to have a realistic timeframe.

Franchise vs. Chain

There are pros and cons for both options, and ultimately there is no right or wrong answer. However, a chain can always consider expanding to the franchise model, while a franchise model can’t be easily converted to a corporate chain. Believe it or not, McDonalds operates as both a corporate chain, as well as franchise!

In a chain model, the onus is on the owner to raise capital.

While both expansions require financing, in a chain model, the onus is on the owner to raise capital for expansion, whereas a franchisor is asking franchisees to buy-in and without a strong brand and path to secure market share, getting investors to buy their own store could prove difficult in such a volatile market.

Product Assortment

If you decide to operate as a chain, the product assortment for each store is usually decided upon by the parent company. This may make it difficult to operate in areas of unknown consumer tastes. As a franchise, the owner/investor of that location can usually influence and curate stock for the store accordingly, as their success means the success of the franchisor.

Thinking Outside the Box

Since the franchise model appeals to entrepreneurial types, there is often a lot of opportunity for some outside of the box thinking. Whether it’s events, promotions, loyalty, social media, or marketing, if it’s successful, it can be replicated in other stores and shared within the network of franchises. As the franchise owner, you can encourage and mold deeper opportunities for your franchisees to increase their revenues, creating more value for your brand.

Daily Operations

Within a chain model, these responsibilities again fall on the head office, so there needs to be a group of individuals who oversee and run the day-to-day details of how the retail stores are run. This can mean higher overhead and a larger payroll than a franchise, where the daily operations are taken on by the owner of that store.

Brand standards are much easier to control in a chain model.

Another thing to consider is that brand standards are much easier to control in a chain model, whereas franchisees are responsible for maintaining your brand, and their standards may not be on par with your expectations. There are ways to curb this issue with strong contracts in place that highlight the dos and don’ts including pricing model, hours of operations, product assortment, as well as marketing and operational procedures. Staffing can be a large undertaking, and within a chain model it would be handled by headquarters, whereas a franchisee would take on hiring staff and training.

Assumed Risk & Revenue Sharing

Expanding with a franchise model means you can increase revenue streams, as these franchisees must invest in the rights to run your retail chain. There is less risk on the parent company, as the profits and losses fall solely on the owner of the franchisee. Expanding with a chain model means there is more responsibility on you as the parent company to ensure each location is profitable, otherwise the entire business can suffer. It’s worth noting that a franchisor will make royalties/profits from each franchisee, however, it will take quite a lot of stores to see the same or similar revenues as in the chain model.

Overall, there are a lot of considerations to make when expanding your retail brand, and every store and location is going to be different. The best thing you can do is sit down and really flesh out what it is you hope to achieve, within the limitations of your budget.

Tags: Bella Mitchell (8), Canada Cannabis (130), cannabis business expansion (1), cannabis franchise or chain (1), Cannabis Industry (168), cannabis product assortment (1), cannabis retail branding (3), SWOT analysis (1)