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Multi-Unit Franchise Ownership

You’ve had experience as a single-unit franchisee, you’ve been successful and you love the concept. So now, why not multiply your units and your profits?

Notice the qualifications. Multi-unit franchising is seldom for beginners. It is also not for the easily contented, who lack the drive and energy to take on more than one unit to manage. Nor is it for those tight on cash – it takes more money and often the franchise fee for new units in a multi-unit situation must be paid up front.

But, for those who can handle it, the rewards can be huge. You do multiply your profits and you do multiply your efforts.

There are other benefits as well. You become a bigger player with your franchisor and warrant more of their attention. You will also likely get to see economies of scale, cost savings on franchise fees and cost savings on management costs.

There are a couple ways to go about this. It depends on the franchisor. Not all franchising companies are the best for multi-unit owners. Your franchise consultant can help you identify those that are particularly friendly to multi-unit setups.

First, if your agreement allows it, you can buy existing units. Or, you can be awarded new units. You might even have an agreement that calls for you to open the new units within a certain geographic area. Some people will even be franchisees of different franchisors.

Be aware that if you have an agreement in which you are the one to open new units in a certain area that there is generally a set schedule to which you must stick. You cannot open them faster, nor can you typically open them slower if your cash flow seems behind what you might need.

There are other challenges. Most likely you will find that the needed skill set to run multiple units is a bit different than to run a single unit. You will still be running a team, but it may be a team of managers rather than being close to every employee. The more units you have the greater distance you have from the rank and file and the more you must rely on great managers and build a great bench from which to draw new managers.

Finally, as usual, bigger reward means bigger risk. You must have the confidence, ability and drive to handle multiple units. But, if you do, the sky is the limit for you.

About the author

Rob Bennett

Rob had served in the corporate-world for 18 years filling various technical capacities, from structural design to project engineer. His experience lends to FranFinders strategic planning, systems design and optimization.

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