This might come as news to many aspiring entrepreneurs looking to get into franchise ownership, but multi-unit franchise ownership is now the norm. Over the past decade, 53% of franchise owners have become multi-unit—meaning that they own and probably personally operate more than one franchise location.
The percentage of multi-unit owners is even higher in terms of franchise ownership in the fast food and restaurant subindustries. Just over 76% of franchised restaurants are now multi-unit. The reasons for this development are straightforward.
Both lenders and franchisors like seeing a franchisee hit his or her stride and are willing to provide more generous private loans to these high flyers. In addition, franchisees who have a track record of franchising greatness easily come into the good graces of franchisors, and area developers are excited to help them find the hottest available territories in that particular fast food industry.
Franchisors also like seeing franchisees take on more responsibilities because franchisees who take on more work and diversify their operations are better able to weather economic downturns or changes in regional customer tendencies.
In layman’s terms, franchisors have faith in multi-unit franchise owners because they’re experienced and able to draw on a larger, more diverse customer base.
This reduces the chances that multi-unit franchise owners are going to run into obstacles. Moreover, multi-unit franchise owners are often superstars at delegating, which means that they can run one, three, five, or seven locations without breaking a sweat.
Streamlined relationships with advertising and marketing networks, vendors, and franchisors are another obvious benefit!
You might notice that up to this point in our discussion, we haven’t focused on the importance of private capital in turning your multi-unit dreams into reality. That’s because franchisors usually assume that multi-unit franchise owners have large capital reserves upon which to draw by virtue of their aspirations to expand further.
As a multi-unit franchise owner, in other words, you have the lay of the land and you know how to make it happen.
You probably have a nuanced feel for your particular area and market and the best way to do business there. There’s also a great chance that as a multi-unit franchise owner, you’ve capitalized on economies of scale and streamlined your hiring, training, and operations processes.
Where multi-unit franchise owners who have all of these professional qualities can run into problems is when it comes to collaborating with the franchisor on a development schedule.
It’s important to be neither too ambitious nor too closed off to new opportunities: You’re trying to expand, not run yourself into the ground. Create a development schedule attuned to your financials and accelerated and growth opportunities in your area.
Choosing the right locations for your multi-unit franchise operation depends primarily on going where customers are. Most area developers deployed on behalf of the franchisor have run demographic and marketing studies on the most opportunity-rich concentrations of customer demand in your area.
You want places that are inherently high traffic when you’re considering fast-food franchising—locations in indoor malls, in outdoor courts, along major roadways, and even on college campuses are great because you’re reaching out to the right demographic and getting seen by tens of thousands of people every day!
Do you want to find out more? Then visit the Hot Dog on a Stick website today!