The Benefits of Multi-Unit Franchising: A Growing Trend
If you’re in franchising and you don’t live under a rock, you’ve probably heard of the concept of multi-unit franchising by now. It has been growing in popularity recently, and it’s not hard to see why.
In life, we often come across situations where the perfect option has three ideal qualities, but we can only pick two. In school, it’s good grades, enough sleep, and a social life. When choosing a house, you want it to be affordable, in a safe neighbourhood, and not far from work.
Basically, it seems like in any area of life, things can only be so good. So for a lot of franchisors, finding a franchisee that shares the vision, is willing to invest in the business, and is easy to work with is a dream come true. Business partnerships are complicated things, because personalities will bleed into them from time to time, and when that time comes, you want to be in business with someone you know you can handle.
It gets us there quicker, and the franchisees are more sophisticated. We don’t have to herd cats.
Chris LaRocca, Crushed Red
That’s what you get with multi-unit franchising.
Franchisees who manage or own more than one location gain experience with your business. They understand the unique ins and outs of the franchise system already, and that allows them to get their new locations up and running much more quickly than someone new to the business can. As their knowledge grows, that experience can be shared. Struggling franchisees have someone new to turn to when they’re not sure what’s going wrong. Multi-unit franchising can widen the amount of support your business is able to offer, if your franchisees are willing, and help the business succeed in more ways than just their own numbers.
Things will change.
Before you get into multi-unit franchising, it’s important to understand a few things. The first being that no relationship is the same. With franchising, it’s easy to have one set of terms all franchisees have to meet in order to remain part of the business. But of course, when a franchisee manages more than one location, that inevitably has to change. They need to have more freedom to earn money and expand than other franchisees.
Franchising is about relationships, and having a strong relationship with your franchisees is easier when they are able to succeed. Struggling franchisees require much more support than strong franchisees, so they cost more, not to mention the franchise makes less money from them as a whole. Encouraging multi-unit franchising reduces that risk.
Communication is also less cumbersome. Fewer people have to coordinate, which means everyone is more engaged and aware of what’s going on in the business. It’s easier to keep tabs on 30 locations if all you have to do is ask 3 people how they’re doing.
It may speed up development.
The first two or three locations probably will not be much different from other locations, but as you go along, your franchisees may develop relationships with realtors and suppliers, which can improve unit expansion rates.
Multi-unit franchising offers a new kind of flexibility. For example, it’s easier to develop business in different areas by allowing one person to take the lead. By managing an entire territory, a franchisee has a better understanding of how the business works for that area.
They’re more invested in the business, literally.
Multi-unit franchisees have poured more money into a brand than single-location owners. That means when push comes to shove, they’re more likely to be willing to go the extra mile to defend the brand and promote an overall better experience. And on top of that, multi-unit franchisees are good business people, which means their locations will have a good reputation and benefit the overall brand. They’re more likely to be careful when hiring employees, and will generally understand that when the brand is damaged or threatened, so is their business.
No matter how you spell it out, multi-unit franchising is a win/win. The franchise as a whole benefits from the experience and speed that goes with franchisees that are able to open multiple locations, and the franchisees benefit by owning multiple locations without having to build up their own brand name. One of the fastest ways to develop your business while minimizing the risk is by working with franchisees you already know and trust. It’s no surprise the trend has caught on.
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About The Better Software Company
The Better Software Company offers a fully-integrated Franchise Operating System (FOS) to help owners improve and simplify their entire business, using a cloud-based model. Integrated features, including CRM, scheduling, billing & invoicing, reporting & analytics and inventory management, offer business owners simplicity and ease of use that will save time. The software is configured to service small and medium sized enterprises in a diversity of vertical markets. The Better Software Company is based in Ottawa, Canada.