This is a guest post from Chad Cohen, VP at Fish Consulting. His thoughts and comments regarding the benefits of multi-unit ownership are interesting in lieu of the industry’s ongoing interest in attracting such a group to grow a franchise system.
It’s the question that hits every new franchisee eventually: How do I work on my business and not in my business? Almost every discussion we have with franchisor clients and prospects is about attracting this franchisee audience to their system. This is a very unique target, but as shared in past posts, a franchise system needs to be ready for MU owners. In the end, it’s about running a solid business with excellent systems.
Going from single unit to multi-unit or multi-brand management can certainly be a challenge. Finding ways to cut costs and improve margins while staying two steps ahead of the competition is only part of the decision process. Access to credit, real estate, and management choices are all pieces of the puzzle.
Multi-unit system growth hinges on a solid business plan and strong leadership to take it to the next level. Expanding from a single-unit to a multi-unit operation requires a unique focus on growth and profitability while maintaining the quality of a franchise system.
Developing a winning strategy for multi-unit growth requires a unique discipline and approach to franchising. The little things can make all the difference.
- Maximize the customer experience
- Measure, monitor, and reinforce — analyze what’s working and what’s not
- Operationalize everything
- Financial management — accurate and actionable
- Define the metrics that matter — cost of goods, inventory turnover, accounts receivable, etc.
- Benchmark your business against prior years and industry standards
- Private equity versus conventional SBA lending
- Ensure your vision is being executed across your entire team
In the end, if you’re a successful single-unit franchisee, multi-unit ownership will require applying the same principles that made you successful in the first place. If you can scale your business and the unit economics make sense, chances are you’ll be a great multi-unit owner and be wealthier for it. Deep down, I’m sure each and every multi-unit owner has a love for their brand’s burgers, pizza or coffee — but ask any one of them and I’m confident they will all tell you that they’re in it for the profits.
Chad Cohen is VP of Fish Consulting, a national PR & marketing firm specializing in serving mature and emerging franchise companies. Learn more at Fish’s Web site or Fish on Franchising blog. Contact Chad via email or Twitter anytime.