Franchisors Moving Toward Preference of Multi-Site Franchisees
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A recent survey of the U.S. Census Bureau found that most franchisees were people in their forties and fifties. These groups of entrepreneurs are mostly corporate people who have either faced the ax due to economic slowdown or left the job voluntarily to strike it on their own. These people have vast experience of marketing and management and bring those corporate skills into the franchise business when they buy a franchise. But they are not satisfied with being just a single-store franchise owner; their financial condition and skills make them bold enough to buy a multi-site franchise business.
That is why more and more franchisors offering franchise business for sale are changing the rules of the game and allowing owners to commit to open more than one store. They generally get a discounted price on the franchise fee, because they undertake to open more locations within a given time-period. It allows the franchisor to expand faster without investing extra time or man-power. And what do the franchisees get from it? Let’s see:
Extra profit: Having more than one successful store means that they have more channel of earning than others. But the franchisees have to make a bigger investment. Though the franchise fee is reduced, but other associated costs increases like renting/buying real estate or equipment, hiring managers and employees and so on. However, all the paperwork, record keeping and other administrative works can be done from a single location, saving you time and money!
Better penetration of the market: Opening more than one store within the assigned territory will make the franchise business more visible. Another positive side is that the advertising cost and promotional cost will be reduced, as the same ad can be used for all the locations within that territory.
Better utilization of employees: Though more staffs will be needed by a multi-sites franchisee, but the employees can be utilized to the maximum benefit. They can be rotated between stores; for example the experienced employees from an established location can be used while opening a new location for ensuring great customer service. Another thing that a franchisee is supposed to do, if he wants to run a multi-site franchise business, is hire very dedicated and competent manager for each of his location.
Better buying power: With a number of locations under him, a multi-sites franchisee can negotiate a better deal with the dealers and distributors for his buying power. He can also better utilize his stocks by rotating them among his locations.
Franchisors Moving Toward Preference of MultiSite Franchisees - To learn more about this author, visit Michael Hemenway's Website.
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