Management must adapt and change as a business grows and develops through different stages. There are four stages of growth found in most business developments. These stages include: stage one, one person operation; stage two, player coach; stage three, intermediate supervision; and stage four, formal organization.

Stage One.  The stage one level shows a one-person operation. While this stage is not rare, this generally does not occur in the development of a franchising business except for the actual franchisor who is thinking about and starting a franchising process.

Stage Two.  Stage two is very common with many small businesses and a few business people will start franchising a small business that is this size.  Here the owner is also the manager/player/coach for all of the other employees.  The owner should generally wait to franchise until he/she has managers that can help with the franchising process. 

Stage Three.  This stage is more typical of most small businesses that start a franchising system. This stage includes intermediate supervision such as managers or assistant managers. This is a difficult stage for many managers because there is a need for intermediate levels of management. Some entrepreneurs find it difficult to allow others to be responsible for the management function.

Stage Four.  Finally, in stage four the small business has emerged into a multi-layered organization. This may occur in many small businesses that start a franchise especially in the food service area where there are managers, assistant managers, and individual workers who work with each of the assistant managers. 

The franchisor now must develop a franchising organization and once again start almost from the stage one system. Generally speaking, however, they will find some expert help. The personnel who will join the franchisor need to be executives who are highly motivated with strong drives and who are able to share the vision of the franchisor in expanding the business through franchising.