Chris Conner

multiple waYs multi-unit franchises paY off

chris conner has worked in the franchise development industry for almost 20 years and helped over 600 brands franchise their brand and develop franchise distribution channels. he founded Franchise Marketing systems in 2009, which now includes a team of 27 franchise consultants based in and canada and supports brands around the world to grow and scale through franchise expansion. visit www.fmsfranchise.com for more information

FRANdata conducted a study citing that over 50% of the franchises in the U.S. are now owned by multi-unit operators - roughly 54%. Multi-unit franchising refers to a franchisor awarding the rights to open and operate several franchised units within a single defined territory.

With the climb in business ownership over the past two years, data from the franchise industry is showing that more and more entrepreneurs are opting for multiple units. As a matter of fact, entry-level franchisees — those who own between 2 to 5 units — make up about 42.3% of average shared units for multi-unit franchises. This evidence suggests that even the green franchise owner with less capital than that of a 50 unit owner can rake in the rewards for their brand of choice.

So, is multi-unit franchising worth it? As with anything, there can be cons to a good thing, but, overall, multi-unit franchising presents an incredible path to business ownership.

Multiplying the Rewards

The time and research it takes to uncover the value and potential profitability in any given brand is exhausting. For a multiunit area development, the hard work pays off even more. Once you’ve vetted your business of choice, taking the leap to ownership is that much more lucrative in a multi-unit setting. One discovery day, one deep dive into the brand, one training program — it all equates to several locations and more return on the investment.

semi-Absentee ownership

If you are seeking to dip a toe into franchise ownership while cleaving to your current career simultaneously, multi-unit franchising could be the right path for you. Typically within the web of franchised locations, a trusted management team can do the majority of the day-to-day leg work while the franchise owner takes a more passive role. Conversely, single unit franchises typically have the franchise owner in a more hands-on management role. A veteran multi-unit operator can own 50 + units, proving the viability of the model for investment purposes alone.

Fee Perks

Most franchises offer a multi-unit discount on the franchise fee or they will waive the franchise fee altogether. Epic Health and Fitness, a 24-hour model based on personal training, results, and proper fitness equipment, is one such brand. After the first franchise fee of $35,000 is paid, under Epic’s multi-unit development agreement, a franchisee receives a $5,000 discount on each subsequent unit. Depending on the concept and needs, a single software subscription or the one time cost for training travel can also be additional money saving perks under the multi-unit model.

Brand Recognition

As a brand expands within a specified territory, the advertising dollars spent on billboards, local publications, social media ads, and other outlets provides a consistent brand presentation throughout the area. Multi-unit franchisees can continue to capture their audience even as they move

“Some of the franchise industry’s biggest brands and most established franchise systems have been developed by women owned franchisors.”

locally, alluring their fans to love more than one location. Press coverage for local events or signage at private catering opportunities can showcase all of the units under your specified umbrella, casting a wider net for potential clientele with these single efforts of exposure.

network-wide Marketing

A perk for both the single and multi-unit franchisee, a brand with great networkwide marketing is even more rewarding. One business that has done this well is Teaspoon, who has steadily closed multiunit deals throughout the past two years. For example, Teaspoon corporate has sunk an impressive amount of time and capital into their unique mini-episode drama that takes place at Teaspoon locations. These episodes can be shared across all unit social media, gaining traffic and spreading the brand even faster.

Resource cross utilization

Although each business is operating independently, the resources can be shared. Whether there is a staff shortage at one location or another unit is short on cups, these resources could potentially be crossutilized to avoid a slow down in business, saving money on rush shipping or saving you from jumping in to lend a hand. “ With the climb in business ownership over the past two years, data from the franchise industry is showing that more and more entrepreneurs are opting for multiple units.”

multiple unit — my team and I can help guide you to the business that fits you best. We’re also here to help you franchise your existing business, complete with operations manual, strategic franchise business plan, FDD, marketing tools, and more.