Owning a single unit franchise can be a sure path to self-sufficiency. But many seasoned franchise owners know that the money is in the numbers – or number of units. Today, roughly 49 percent of franchisees are multi-unit owners. So if you want to grow in numbers and become a multi-unit franchisee, successful franchisees will tell you a mindset change is needed.
As you begin to consider whether your next move should be as a multi-unit operator, believe it or not, today’s rocky economy might very well be opening doors for that type of franchisee growth.
While other business owners might find it hard to acquire credit, established franchisees oftentimes can bank on their relationship with their franchisor to support their growth. If a franchisee is a known and proven operator, franchisors may be open to negotiate franchise fees and other agreement terms allowing the franchisee to expand by purchasing existing units, or expanding untapped territories. Also, for retail business concepts, the plethora of available commercial real estate is forcing landlords to be more flexible in their agreements and to be more likely to negotiate terms. And, if the franchise business model requires employees, the high rate of unemployment can take pressure off finding and retaining talented, qualified employees.
Okay, so while the economy might be creating opportunities for franchise growth, once you become a multi-unit owner, what does it take in the long run to become successful? No matter what sector you invest in, you cannot build an empire without strategic planning and effective leadership. Your strategic plan should draw on a team of advisors that includes a franchise business coach, financial experts, legal resources, and others. Depending on how many units are at stake, building a multi-unit operation requires stepping away from micro-managing and becoming comfortable with delegation.
Taking your business to the next level also requires creating an efficient, high-performing infrastructure. You will save time, money and efficiency as you systematize many of the operational processes that work well for your one unit. And, depending on the number of units you invest in, you’ll ultimately need to create clearly defined departments (i.e. human resources, operations, training, etc.) staffed by the best people you can find.
Although the initial total investment for multi-unit franchising is higher than opening a single unit franchise, the risk can sometimes be lower. Owning more units can actually increase the overall probability of success. Also, multi-unit franchisees are likely to have more input with their franchisor, creating a win-win situation for both sides.
My next blog will discuss the benefits of owning not only multiple units, but multi-brands as well.