Many Franchisors Prefer Multi-Site Operators These Days
If you have been following the history of franchising, you will notice that the profile of a successful franchisee has changed over the years. Before, a successful franchisee was such a person who used franchising as a safety net and was an owner-operator. He worked himself in his unit and was happy with the success it brought him. Now, cut to the present scenario. Today, college graduates as well as corporate bigwigs are starting franchises. There are even business entities who are investing in the franchise industry. Do you think these people will be happy in running a single location? Of course not; and that is why there is a shift from single-site, single location franchisees to multi-site franchisees.
The multi-site franchisees can be of two types. They can either be an area developer or a franchisee who increases his unit number after the success of the first. The difference is that the first one signs the franchise agreement for opening more than one unit within a given period of time while the second franchisee enters a fresh franchise agreement every time he or she opens a new unit. Now, the question is why are the franchisors so happy to see the multi-site franchisees? Because, they are the ultimate winners in this scenario! When a single person buys the right to open more than one unit, the job of the franchisor becomes so easy! Now, the franchisor doesn’t have to look for more franchisees to respond to its franchise business for sale offers in that particular area.
Hence, a franchisor that supports multi-sites franchisees finds its resources free to support other new markets. So, it can spread faster within a short period of time. Along with increase in unit numbers, the franchisor enjoys various benefits. The market position of the franchisor increases with the expansion of the chain. That attracts new franchisees looking for top franchises in the market. It also allows the franchisor to become an international franchise faster. The distinguished brand-name of the franchisor ensures that it can have more facilities from the suppliers and manufacturers. As a result, the profit margin of the whole concept increases over time. That is why when a franchisor chooses multi-site franchisees; the brand-name and market value of the company increases automatically.
Have a question for Michael? Ask or leave a comment below!