Special Feature: Are You Ready to Be a Multi-unit Franchisee?

As confidence in franchising as a resilient and reliable business model grows, more and more growth-minded franchisees are thinking big and looking to expand their empire.

Multi-unit franchising offers a way for those with big business dreams to go from operating a single store or service to overseeing several units.

Some business investors want to focus on just one franchise; it’s their domain, their livelihood and their single focus. The business may be a family operation or passion project for a retired couple, or maybe it’s the bread and butter of a firsttime business owner who is dedicated to putting all their effort into growing that individual store or service.

For other investors, franchising is a way of building something bigger. Maybe they are highly experienced franchise owners who are ready to expand their footprint, or a business-savvy investor who sees the potential profit in operating multiple locations.

Whatever your reason for franchising, it’s important to ask yourself:

Is multi-unit franchising a smart choice for your future? The more franchises you operate, the more profit and money you can generate. But dedicating oneself to more than one unit takes time and money. Patience is key.

It’s generally recommended for franchisees to become familiar with a franchise while waiting to turn a profit in order to gain back their initial investment. Then, once they have attained enough financial assets, they can feel confident in buying into another outlet of the same franchise. Using this model, the entrepreneurial franchisee can slowly but steadily grow a solid network, replicating the process with each outlet. While this is the safest way for cautious franchise operators to expand their network, there are more direct paths to franchise growth for those willing to take a few risks.

Investing in multiple units at once can see quick results for opportunists who are prepared to multi-task the management of multiple units.

In addition to the tried-and-tested models of operating multiple units within the one franchise brand, another, slightly less common, option is for multi-unit investors to own different types of franchise brands. While single-brand, multi-unit franchising is still the standard method of operating a franchise network, running multiple stores across multiple brands can, cautiously, be done. Traditionally, franchise investment used to come with protected territory clauses, which prevented franchisees from investing in competitors within a certain distance, but some franchisors are starting to loosen their rules around exclusivity rights to adapt to this developing demand from entrepreneurial franchisees.

Which leads us to the most important attribute of a successful multi-unit franchisor:

Seeing the bigger picture

Instead of running the day-to-day operations of a single unit where you can hone-in on the specific needs of that one store or service, multi-unit franchisors need to take a broad view of operations across multiple locations or service providers. For entrepreneurs who enjoy strategizing, financial forecasting and envisioning business trends, managing multiple locations can be highly rewarding and potentially very lucrative.

But these are skills and attributes that don’t come naturally to everyone, so be sure you have the right personality fit before making any key decisions. And, of course, you must be passionate about the brand as, in many ways, becoming a multi-unit franchisor makes you an ambassador for that brand. You must be highly focused on growing brand awareness and be invested in its success.

Multi-unit also means multi-tasking, so consider how you will juggle and prioritize the needs of each unit. How does one unit impact the other? How will you manage the staffing needs of each unit and the personal relationships with management and other staff members? The dynamics of being a hands-on sole franchise operator is very different to being an infrequent presence among several different units across a large territory.

So, before you begin down the path to multi-unit ownership, do your homework. This means being highly focused on:

The importance of due diligence

Before committing to an initial investment in multi-unit ownership, it is vital to dig deep into due diligence. Some franchises are more tailor-made for network growth than others. Some even offer discounts for secondary units and have operational systems purposely laid out for multi-unit franchising. So, if you have a long-term vision to operate more units, find out now if the franchise has growth potential. Even if there is a possibility to own multiple units, you need to know upfront what the franchisor’s financial expectations are. Some multi-unit focused franchises are only prepared to allow highly financed individuals to become multi-unit operators.

Spend some time researching the expectations and requirements of the franchise, attend networking events and franchise expos, and speak to existing multi-unit franchisees to learn more about their experiences and the pros and cons they have encountered, and what support and training is offered.

It’s important to be realistic about your goals, your abilities and your financial security. Success depends upon due diligence, so do your homework before committing to any big decisions. If you put the work in early, you will pave the best path – or multiple paths - forward.

To see what franchises are available, explore our Franchise Directory: https://franchisingusamagazine.com/franchisedirectory