As we've blogged in the past, there are two kinds of franchisees. There's the individial, independent start-up owners - people who own a single franchise - and there are people who have amassed a few different franchises units of over the years, otherwise known as multi-unit owners. While there's no single way to succeed in franchising, it's interesting to see certain franchise brands favoring one kind of franchisee over the other.
The Wall Street Journal wrote about this phenomenon recently. In an article abot food franchises, they report that it's easier to own a lot of individual units as opposed to the single unit. When tracking the franchise output of the likes of McDonald's, Burger King and Applebees, they say that more new units are being awarded to people who already own a number of franchises. They quote FranData info that says 36% of franchisees in America are multi-unit owners. That adds up to about 60,000 franchisees. That's a pretty healthy chunk of America's franchisees.
Darrell Johnson of FranData explains the success of multi-unit franchisees like this:
"Banks were basically not lending," he says. "So franchisers focused first on the proven operators with strong cash flows."
The story also quotes news that Burger King plan to sold whopping 278 Burger King franchises to a single owner in April. With news that the big franchises are proving to deal mostly with multi-units owners, it seems that smart entrepreneurs looking to own single units are looking to work with ambitous start-up franchises. Something to consider if you're considering entering the food franchise industry.