Multi-Unit Franchise

Owning multiple units of a franchise is not for everyone. It requires a higher investment upfront and can take longer to establish, but it can also mean larger gains in the long term. Multi-unit owners also benefit from greater stability as their success is not reliant on just one location.

As you approach franchising, it is important to think with the end in mind. Is your goal to grow your business over time to own multiple units or is the goal an immediate job change? If the answer is multi-unit franchising, there are some things to take into consideration when weighing a business model’s offering:

  • Is the business model designed to scale? An owner operator business model is not conducive to scaling. You would be tied to the daily operations of the business, limiting your potential for growth. On the other hand, a semi-absentee or manager-led business model is better suited for scaling. You would hire a manager who would oversee the day-to-day operations. This allows you to focus on managing your team of managers at a higher level, giving you the capacity to operate multiple locations.
  • Are your personality traits and skill set a good fit for the role of multi-unit owner? Strong management skills are necessary. If you are not comfortable letting someone else manage and handle the daily operations of your store, this may not be a good fit. Your role in this type of ownership is working on your business not in it.
  • Does the brand have the infrastructure in place to support multi-unit growth? What sort of support is being offered? Are the operational, marketing and technical systems in place? Has the brand demonstrated a track record of success with multi-unit franchisees? Validate with multi-unit owners within the brand you are considering. Find out the average number of units a franchisee owns system-wide and the number of units operated by the largest multi-unit owner. Ask them about the support they have received and how it facilitated their rate of growth.
  • Does the brand have a rigorous selection process? A rigorous selection process signifies a brand’s commitment to a franchisee’s long-term success. They have identified criteria of what contributes to success within their business model and are taking the time to determine whether you are a good fit for the brand and vice versa. It means they are not out for the quick sale and want to protect the brand.
  • Consider the development schedule and territory defined in the Franchise Agreement. Does this seem like something you can adhere to? What support do they offer to help you keep that schedule? A good location for your business is essential to how well it does. How does the real estate department handle site selection? Is there any sort of priority policy to ensure every franchisee gets the opportunity to find a site that works best for them? What sort of resources does the brand provide when it comes to real estate selection and negotiation?

Finding the business model that best fits your personal and financial goals is key to your success in franchising. If owning multiple units is one of those goals, it’s necessary to find a franchise offering that has proven its ability to scale.