An interest in a franchise business is growing constantly. However, a detailed analysis of success factors and the functional strategies seems to lack in the franchise operator position. Paris Baguette Bakery was involved in the latecomer to the franchise industry in 1986. Paris Baguette Bakery was constantly promoting a differentiated franchise system and a progressive brand image. Also marketing strategy based on the needs of customers and sales region characteristics were pursued. Through unique marketing activities and new product development efforts, 10 years later, in 1997, the company has grown to top company. As a single card, ‘Happy Point Card’ has a membership of more than 8 million people. And built the industry’s best position in Paris Baguette case was the result by aggressive product development, marketing differentiation and brand image. Eventually franchise business will be successful that customer, franchisee and the franchisor must cooperate with each other to make a comprehensive infrastructure and systems. - Creation of new product categories, new product development, customer oriented marketing strategy, store location strategy, store layout study for efficiency improvement, shipping, logistics, store management basic five principles (quality, freshness, items, cleanliness, service) as well, communicating with franchisee, training for supervisors, etc. To do so, the infrastructure and systems should be prepared and management strategies should be executed thoroughly. In this study, we discuss the implications that business performance and competit- ive advantage can be achieved by an active product development, differentiated marketing activities and systematic execution.