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The Multi-unit Movement benefits Franchisors and Franchisees

Written by: Mary Tomzack

Article Overview: There is growing evidence of a trend toward multi-unit and multi-brand ownership. The advantages to both franchisors and franchisees are clearly compelling, and dramatic growth in multi-unit and multi-concept franchising is expected over the coming years. Read more...

The Multi-unit Movement benefits Franchisors and Franchisees

Right now, more than one out of ten franchisees operate more than one unit. Many of them operate more than one concept. There is growing evidence of a trend toward multi-unit and multi-brand ownership. The advantages to both franchisors and franchisees are clearly compelling, and dramatic growth in multi-unit and multi-concept franchising is expected over the coming years.


The primary benefit for franchise companies is the opportunity for fast, efficient growth. Area developers who can develop an entire geographical area are ideal because they have strong organizations of their own, which the franchisor can leverage. It takes a much smaller investment in time and money to develop a region or even an entire state when you're dealing with one individual instead of 50. Franchisors who don't have to spend time on the nitty gritty business of opening stores can focus on extending brand awareness - which again, can grow much more rapidly.


The benefits are there for franchisees, too. It's becoming increasingly difficult to make a living from a single unit or even a couple of units. Owners with multiple units and/or brands have the added advantage of being able to spread the risk. Times may be slow for one, but rarely for all - at least not at the same time. Multi-unit operators also report that attaining success gets easier as the number of units grows. Costs per store unit drops, which means more money is available for better managers and better marketing.

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Re: Kevin's Case Study #6 - Marketing an information resource? - [quote="Evan":3ndb7usp]Hi Sebastien, I'm wondering about two things: 1) What is your current revenue model? 2) Why would franchise owners choose to sign up with you over the lead generation companies? Is there some kind of quality control certification that you could award them to say that they are a World Franchising certified franchise? I'm not clear on what benefits a company seeking to franchise would really get from your site beyond the lead generation component.[/quote:3ndb7usp] Hello Evan, 1. We currently make money from what you may call lead generation. Franchisors pay us a fee to be on our websites and in our top seller franchise guides. We also generate money from other avenue; mostly by selling hard-to-get information about franchising (UFOCs, etc...) 2. That's exactly what I'm trying to answer.... I want to get away from the lead generation perception. I want to be seen as a good information resource, which we are. I have started to take the association angle and I am now looking to provide great benefits to our Members (used to be called clients). I think I'm on the right way. I made a lot of progress the last couple days.
Make Yourself Attractive - I've found that its much easier to find joint venture partners when you make yourself an attractive JV partner. What benefits are there for the people that you want to partner with? This list of benefits should grow and become stronger over time. Shri
Re: Best incentive to offer employees - [quote="Evan":31y2csyt]What's the best incentive to offer employees? Is it more health benefits? More vacation? Health club memberships? Paying for training? Cash / non-cash bonuses & rewards? I'm preparing a new package for my company and would love to get your thoughts! Thank you in advance![/quote:31y2csyt] A tough part of this is that different people have different needs. I used to work at a local hospital and we had great benefits, but there were a number of things I just never used. Is it possible to offer several different options? I'm thinking kind of like a cafeteria style insurance plan where you pick the benefits that you need. The initial planning would be a pain, but that way the employees would each be able to chose the benefits that fill their personal and/or family needs. You could also make a list of the sort of things you are thinking about and send out a survey to get thoughts from your people. See what they need and would respond to. Shri
Equipment leasing - Equipment leasing has many benefits, such as tax benefits, conserving money and always having up to date equipment to stay competative to name a few. Obviously, it's partially dependent upon what type of business you have as to whether you will benefit more than someone else but... Do you think it's worth leasing your equipment rather than purchasing it? Can you think of any other reasons you can benefit from it or any reasons this is not a good idea?
Think like an Association - Hey Sebastian, Maybe you could try thinking like an Association... I would study the structure or formats used by other Associations. What are they doing to add value for their members? The BBB plays a monitoring role for consumers by gathering data about business' that are behaving badly. And they're pretty successful at it too. Maybe you can offer a 'Platinum Program' that franchisors buy into. Accredited members only. Criteria could be strict: 1. Age (stability): 10+ years 2. Satisfied franchisees: 85% + satisfaction 3. Size (stability again): 250 units 4. Strong profits 5. Great management -Maybe a 'Gold Program' for those Franchisors that aren't quite at that level, but can strive to reach it... -Top 100, 500, 1000 Listing for qualified members... maybe a slap at Entrepreneur.com and their biased top 10 lists... -Maybe act as a monitor like BBB? -Maybe team up with FranSurvey OR do something similar for each member (not sure about Fransurvey's rep, but I like the concept) There's so much discontent within the franchising arena that I think if you were part of the solution, then you could create a win/win with your Association. The only downside is that this power can get abused if there aren't good checks and balances within the association.


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