Expanding a franchise concept through multi-unit agreements benefits both the franchisee and the franchisor.
The franchising industry is booming with new brands creating more options for franchisors and franchisees. Individuals can fulfill their dreams of owning their own business through franchise ownership. One of the most popular forms of franchising is multiple unit franchising.
In recent years, there has been a steady expansion of multi-unit franchising, which allows franchisees to operate more than one unit in a given territory. This attractive opportunity for entrepreneurs has grown dramatically and franchisees with multiple units now owns 53.9% of total franchise units in 2022.
Choosing multi-unit franchising can be the right strategy for your new business venture.
the franchisee
A multi-unit franchise can be a great opportunity for you to expand as a franchisee when you’re ready. Are you excited about the brand, do you enjoy the people you work with at the franchise, and do you have access to capital to develop multiple units? Some of the benefits of multi-unit franchising include the ability to build a larger management team and use it across more than one operation, streamline advertising and marketing spend across all your locations, and increase sales to increase financial wealth. to build.
There is often a financial benefit from signing up as a multi-unit operator in a franchise system. Typically, the franchisor will reduce the franchise fee upfront if you commit to buying more units when you sign up. The agreement may give you the rights to a development schedule for expansion in your area with multiple locations or territories over a period of time.
When someone has the rights to develop multiple units, the franchisor is as committed to you as you are to them. When you expand to more units, you and the franchisor will agree to the timeline when opening those locations. Once you have your first location or territory open, the operations behind opening your second, third or additional units will become easier to operate and your systems will become more streamlined given your knowledge and experience.
Build a trusting team to help you open more than one unit.
Another benefit of centralized locations or territories is the ability to travel more easily between locations or areas, share staff resources, and reduce overheads required for more than one location.
Keep in mind that opening multiple units in your designated geographic region can also present some challenges. It is impossible for a multi-unit franchisee to be physically present in every location at the same time. While you may feel the desire to control every facet of unit operations, multi-unit expansion requires you to implement an infrastructure of both management and personnel you can count on. You must delegate responsibilities to a trusted team ready to help you grow. If you’re not willing to give up some of that control and need to be involved in every aspect of your business, multi-unit ownership may not be right for you.
the franchisor
For the franchisor, multi-unit expansion can be a great strategy as it typically helps accelerate the franchise brand growth. This is an important commitment to the franchisor, so you need to find the right multi-unit franchisee who can expand the brand and open additional units as promised on the development timeline.
A major benefit of multi-unit expansion is the trust you can build with the right franchisee or group looking to grow and build your brand. This deep connection can be hugely beneficial for both parties, leading to a stronger company for all.
Each unit in the area or region is opened by the same franchisee; thereby creating fewer challenges and having strong operational stability with the right franchisee. Having this uniformity across the company should result in a more organized business plan for growth and you can focus on fewer franchise partners to work with as they open multiple units or locations. Both the franchisee and franchisor will be able to grow and expand their business faster than single-unit franchisees.
Faster unit and revenue growth.
Is multi-unit franchising right for you?
The multi-unit approach has grown in popularity in recent years due to its many benefits to both the franchisee and franchisor.
Accelerated brand growth
Stronger Franchisees
Faster revenue growth
Established Franchisors
Whichever side you’re on, it’s important to look at multi-unit franchising from the perspective of your goals, adequate access to capital, and the right level of support to make the brand and each individual business a success.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.