Universities Go Nationwide: The Franchise Model Comes to Higher Ed

1,000 students and 100 faculty members. That's the scale of Vanderbilt University's new San Francisco campus, set to open in 2027. But this isn't just another satellite program—it's a bold experiment that could reshape how we think about higher education.

For decades, universities have been inextricably tied to their locations: Oxford, Cambridge, Harvard. Now, that's changing. Vanderbilt is betting that the future belongs to universities that can be everywhere at once.

From Regional Prestige to National Ambition

Vanderbilt has long competed for the unofficial title of "Harvard of the South." But Chancellor Daniel Diermeier had a different vision: What if Vanderbilt could also become the Harvard of the West?

Last month's announcement that Vanderbilt would acquire the financially troubled California College of the Arts and convert it into a full undergraduate campus represents something unprecedented. Unlike traditional satellite campuses—typically overseas graduate programs—this will be a complete four-year undergraduate college in San Francisco's Design District.

"A core component of being a great university in the 21st century is to be part of an innovation economy," Diermeier explained. He pointed to Stanford in the 1990s, when the university became central to Silicon Valley's tech boom. "Location becomes a strategy."

The Pioneer's Playbook

Northeastern University pioneered this "national chain" model. Since 2011, it has opened eight branch campuses across the U.S. and Canada. The strategy has paid off dramatically: once ranked around 150th nationally, Northeastern now sits in the top 50.

"A university cannot be defined by its campus," Northeastern President Joseph Aoun told me. "We're going to them rather than asking them to come to one campus." The approach allows universities to enroll more students—raising tuition revenue—without diluting their main campus's selectivity.

Northeastern's recent acquisitions of Mills College in Oakland and Marymount Manhattan College in New York show how aggressive this expansion has become. Aoun receives requests from at least one college seeking acquisition every week.

The Demographics Behind the Strategy

This expansion frenzy isn't happening in a vacuum. The population of American 18-year-olds will peak this year, followed by a steep decline. Education consultant Peter Stokes has identified nearly 400 private colleges at risk of closure in the next five to ten years.

"It's higher education's 'Age of Conquest,'" says Ryan Allen, an education professor at Soka University of America. "The big schools will get bigger, and the smaller schools will be absorbed."

For ambitious universities like Vanderbilt, this crisis creates opportunity. Struggling colleges in desirable locations—major cities or booming Sun Belt states—become attractive acquisition targets for their real estate and facilities.

The Risks of Educational Empire-Building

But the franchise model carries significant risks. Drexel University's Sacramento campus fizzled out after six years. Middlebury College is winding down its California programs. "It can become like managing an empire," Stokes warned. "If you get too geographically dispersed, it can be difficult to maintain the front of the empire."

The biggest risk might be brand dilution. Ivy League universities are highly unlikely to follow this path—their power depends on exclusivity. But institutions in the next tier down, like Vanderbilt, face a different calculation. They're exclusive enough to maintain prestige, but not so exclusive that they can't experiment.

What This Means for Students and Families

For prospective students, this trend could fundamentally change the college selection process. Soon, high schoolers accepted to top universities might face a new question their parents never did: "Which location?"

This shift could democratize access to elite education by bringing prestigious universities to more markets. A student interested in tech might choose Vanderbilt's San Francisco campus over its Nashville home base. Conversely, it might accelerate the decline of regional institutions that can't compete with nationally branded alternatives.

The Global Context

This domestic expansion follows earlier waves of international growth. Universities like NYU established campuses in Abu Dhabi and Shanghai, while Northwestern opened in Qatar. But those were often seen as revenue-generating sidelines. The new domestic model treats each campus as integral to the university's core mission.

Nearly 20 institutions now have satellite campuses in Washington, D.C., alone. Johns Hopkins paid over $370 million in 2019 to acquire the former Newseum building for its international studies school.