Multi-Unit Franchise Ownership: A Promising Model

Do you think that owning a franchise is simply not enough to satisfy your entrepreneurial ambitions? Do you think that the experience will be too boring since you are provided with the banner and everything that comes with it? Where is the adventure, the adrenaline rush you crave?

Well, have you ever heard of multi-unit franchising? This trend is on the rise in the franchise industry. It allows franchisors effectively optimize and develop their networks by grouping their points of service under the ownership of selected franchisees who aspire to take on greater entrepreneurial challenges.

Indeed, the number of franchisors who select new franchisees based on their skills, business potential and available budget needed to develop several points of service has been growing steadily. Even though the task of recruiting these franchisees is more challenging, it is definitely worth it: these driven entrepreneurs will share the responsibility of growing the network, making it stronger and more efficient with the franchisor who used to bear the full load of this difficult mission.

According to the Fédération française de la franchise (Annual Franchise Review 2016), 28% of franchisees operate several points of service under the same banner, while only 14% operate several points of service under different banners. Among those operating several points of service under the same banner, 16% have 2 locations and 12% have 3 and more locations. Nearly 3 in 10 franchisees (28%) plan to invest in another point of service, mainly in the same network, showing a steady trend since 2013. Entrepreneurs in the 18-34 age bracket are the most ambitious ones: 43% of them consider opening another point of service under the same banner, compared to just 8% in 2009.[1]

If you too have a strong entrepreneurial profile, this multi-unit franchise model might be what you are looking for. It offers more challenges and more revenue opportunities. When owning a franchise, it becomes easier to add another point of service. The benefits of multi-unit franchising include cost pooling, higher borrowing power and optimized management, to name a few. According to a study by Essca EM and the FFF, multi-unit franchisees report higher average sales and profitability per unit than single-unit franchisees.[2]

At the same time, this entrepreneurial venture means more challenges. The acquisition of several points of service will require a higher-level management style with less involvement in daily operations. You would need to build a strong team with complementary skills. Generally, it is recommended to wait till the first point of service becomes profitable before investing in another one.

If you have the drive and desire to own more than one franchise, make sure the franchisor considers you for a multi-unit franchising model, even before you embark on this great adventure. And always have fun!

FlagFranchise team