Franchisees Opening Multiple Sites
A Growing Number of Franchises Prefer Those Willing to Tackle More
It used to be that a franchisee owned one location and ran it and was happy as an owner operator. These days, though, entrepreneurs with bigger visions are franchising.
That means those with serious career ambitions are opening one location, growing it, then opening another. Others are jumping in with multiple locations off the bat. The stability and rewards of the franchising industry are the biggest reason why. Franchising is no longer just an option for someone who wants to own his own small business, but great for those who want to build their own empires.
Technology is making this easier as well. A multi-site operator can be in one location and is available by phone, Internet and, in some cases, can immediately access the cash register receipts of a location via a PDA.
What Is a Multi-Unit Franchisee?
There are three main categories and some franchisors label them differently. A master developer can cover an entire country or certain demographic area. His focus and effort is on selling franchises. While he may open a site or two, this is not his main focus. An area developer differs slightly, in that she likely has a smaller territory and in most cases agrees to open a set number of locations on her own in a specified time. There's less emphasis on selling the business to others. An area developer who fails to grow the business at the agreed on rate may lose his or her territory.
Other multi-site franchisees are those who have opened one location and want to grow into more. This, particularly, is a sign of strength of the franchisor.
Why Franchisors Like Multi-Site Franchisees
The franchisor doesn’t have to spend time finding suitable candidates to open each single market. Since the same person is opening more than one unit, training him once while he was starting a franchise for the first time is enough. All the franchisor has to do is provide the required support system. There may need to be additional discussions about demographics and site location. But this person already knows how to run the business and has a greater shot at managing a second location.
Most franchise opportunities respond by lowering the franchise fee for the multi-unit franchisees. They also provide adequate real estate support. As a result, the franchisors can grow at a faster rate within a short period of time.
What it Says About a Franchisor
If you are exploring opening a franchise, give consideration to this figure. The more multi-site operators, the greater the strength of the franchise. (Do note that not all franchisors offer multi-site deals and if there's a reason not to offer them, this doesn't factor as heavily into your decision.) But if there are multi-site options, those who have put more money and effort into the business signal enthusiasm and some measure of success in their first location. More unit numbers also mean better deals from the manufacturers and suppliers. That increases the profit margin for both the franchisor and the franchisees. It also increases the brand value of the franchise opportunity.
