Multi-Unit Franchising, A Growing Trend

Posted by FranSave on December 7, 2021

Did you know that there are business owners who choose to franchise not one, but TWO OR MORE franchises? We’ve discussed a lot about the growth and appeal of the franchise market, one of the reasons it’s our mission to facilitate franchisees as well as consultants, but we’re now seeing a growing trend in multi-unit franchising.

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A multi-unit franchise refers to franchisees who take on more than one of business unit of the same parent franchise. It could be like owning multiple restaurants from the same chain. This is no rare occurrence either. FranData reports that multi-unit owners manage or control 54% of American franchisees. Here are some other facts:

  • From 2010 to 2018, there was a 23% increase in entry-level multi-unit owners.
  • 43,212 of multi-unit owners control more than 223,213 American Franchise units.
  • Industries with the highest concentration of multi-unit franchise control . . .
    • Fast Food – 82% of them
    • Sit-Down Restaurants – 72% of them
    • Beauty-Related Shops – 71% of them
    • Baked Good Shops – 57% of them
    • Clothing & Accessory Stores – 55% of them
    • Automotive Businesses – 54% of them
    • Real Estate Companies – 52% of them

Of course, one of the takeaways from this phenomenon is that managing a franchise(s) can look very different for various owners. If you were to own five different locations, you would obviously not directly oversee the operations of each one. Such franchisees begin to function more as district managers once they get to that level of business complexity.

Ways To Make A Multi-Unit Franchise System Profitable

There are certain steps you would want to take to give yourself every opportunity to run a successful multifaceted franchise system.

  • Establish A Good Business Model
      • Don’t go into business without a plan. You must figure out the most cost-effective ways to profit when using a complicated system of multiple business locations. In general, service businesses without specific addresses are experiencing higher profit margins lately.
  • Cash Management
      • One of the benefits of franchising is that you can get a quick start with cashflow, something that is not always true when striking out alone. Either way, you need a thorough and professionally facilitated accounting system if you want to stand a chance at managing two to five franchise units.
  • Get Good Talent
      • This should be obvious and it’s true for single-franchise owners as well. The more hierarchy you introduce into your business, the more time you’ll want to spend on this step.
  • Location Matters
      • Business placement can be every bit as critical as where you choose to buy your home. For all brick-and-mortar businesses, the adage of “location, location, location” still holds very true.
  • Determine Market Demand
      • How big is your business? Is it appropriate for small, medium, and/or large communities?
  • Use Good Branding
    • One of the best parts about franchising is that you can (and must) leverage the awesome branding power of the parent company. This gives you a chance for success right out of the gate, assuming you select a good partner company.

We hope you enjoyed this quick primer into multi-unit franchises. FranSave seeks to educate, counsel, and assist prospective franchisees on the advantages of this huge trend in American business. If you want to learn more about how you can become a franchise owner, call us any time at 844-476-7776.

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This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If you are a resident of one of these states, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your jurisdiction. Franchise offerings are made by Franchise Disclosure Document only.

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