In the late 1960s, Franco began considering a succession plan to ensure the continuity of his regime after his death. He wanted a successor who could maintain political stability and uphold the principles of his National Movement.

In July 1969, Franco passed the Organic Law of the State, which formally established the Spanish monarchy as the system of government and outlined the role of the future king. On July 22, 1969, he officially designated Prince Juan Carlos as his successor, granting him the title of "Prince of Spain." Juan Carlos was the grandson of King Alfonso XIII, who had been forced into exile following the establishment of the Second Spanish Republic in 1931.

Franco's choice of Juan Carlos was a calculated one. The young prince had been educated in Spain under Franco's supervision and was considered loyal to the regime. Franco believed that Juan Carlos would continue to uphold the values of his government and maintain the status quo after his death. However, Franco's assumption would prove to be mistaken, as Juan Carlos went on to play a crucial role in dismantling the dictatorship and paving the way for democracy in Spain.