Maybe franchises shouldn't be renewed? If an operator is found to offer a good, reliable service to passengers maybe they should just get extensions as long as they continue to provide that?
Each extension could bring opportunities to make alterations to the franchise every couple of years, such as new rolling stock, routes etc...
It could incentivise the operator to ensure they are providing a good, reliable service to passengers at all times and investing in their network, as if they do, they get to keep it.
If another operator has a better track record and offers a more competitive service, they could take the franchise at one of the renewals?
But that's just a theory... A train theory...