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Multiply your Franchising Success

News, Articles, Success Stories and Advice on Franchising
Multiply your Franchising Success

Multiply your Franchising Success

The past decade has seen a major shift towards multi-unit franchising. This trend continues both internationally and locally as many franchisors including well-known brands such as Spur, KFC and McDonalds prefer to deal with fewer, experienced franchisees.

Multi-unit franchising allows franchisees to build real wealth, experience new challenges and put their strong management skills to the test. Are you suited to being a multi-unit franchisee? We take a look at the typical franchisee and pros and cons of multi-unit franchising.

Multi-unit franchising: A definition

Multi-unit franchising is where the franchisee opens more than one unit. Some franchisees own more than one unit of the same brand, while others build a portfolio of different franchise brands. It’s not that unusual to find a franchisee who owns a petrol station and a few competing fast food outlets. The challenge is balancing these interests; building up a mini-network of the same brand may be an easier option.

Regardless, of this preference, multi-unit franchising means that the franchisee is less involved in daily operations and focuses on managing different locations at a higher level. This means that the franchisee will need to recruit and train managers to ensure that every location runs smoothly. The franchisee nevertheless needs to be in touch with what’s happening on the ground with checks and balances in place.

 

thumbs upThe upside of multi-unit franchising

  • Provides the next level of career growth and challenge.
  • Scope to groom, develop and incentivise top managers.
  • More input with the franchisor in the strategic direction of the overall brand.
  • Ability to benchmark different units.
  • Potential to build real wealth.

thumbs downPotential pitfalls

  • Managing and travelling between units may become onerous.
  • More staff can also mean more HR challenges.
  • The risk of losing the owner-operator edge.
  • Increased exposure to a brand.

A fit for high energy, ambitious franchisees

This brand of franchising suits individuals with strong entrepreneurial leanings, empire building ambitions and superb managerial abilities. These tend to be franchisees who have both excelled and enjoyed the experience of building a successful franchise. They recognise the value of expanding their business interests through franchising, which offers ongoing support and systems. It’s simply much easier than building a stand-alone branch network!

However, success in one franchise does not necessarily mean that you’ll run a hugely profitable multi-unit operation. The skills required for multi-unit ownership are completely different to those required as an owner-operator. Franchisees need to take a long and hard look at themselves and decide whether they can cope with the additional responsibility and pressure. Here are some questions to ask yourself:

  1. Are you able to delegate effectively?
  2. Are you prepared for sacrifice significantly more of your spare time?
  3. Do you enjoy managing and training people?
  4. Are you organised with excellent administration skills?
  5. Will you miss interacting with customers?

Magic_NumberWhat’s the magic number?

Having two units is also vastly different from managing five or more units. There is no point of having a number of mediocre franchise; one great franchisee can be just as financially rewarding with significantly less hassle. If multi-unit franchising sounds appealing then it’s a question of pace; each unit must be up and running smoothly before the next unit is opened.

Speak to our experts

MegaphoneChat to our experts regarding your franchising horizon; you may be looking for your first franchise opportunity or perhaps you’re considering adding a second. We have the legal, finance and franchising experts able to steer you in the right direction. We also offer the widest range of exciting franchise concepts – have a look at some of our latest listings.

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