Some people poised for franchise success are not happy with just owning one business. Luckily, franchising is flexible enough to cater to many business tastes and for those people ready to carve out huge areas at one time, we recommend multi-unit franchising.
While the vast majority of franchisees are single-unit owners, multi-unit owners still own a disproportionate amount of franchises. As a 2008 study on multi-unit ownership tells us: “3% of all franchisees own more than 5 units but they control 24% of all franchised units”. In fact, that number has only increased in recent years. Over the last ten years multi-unit franchising has expanded rapidly and its growth has really changed franchising.
The FranData article is a great resource for people considering multi-unit ownership. Among many nuggets of information is the following statement about the kinds of franchisors ideal for a multi-unit relationship.
“Most prospective multi unit franchisees will tell you that they look for new franchisors with experienced management, strong unit economics, a successful multi unit history, and appropriate infrastructure (including personnel necessary to support multi-unit operations), a strong brand and recognized marks, some level of integrated supply chain management, and a reputation for enforcing system standards.
Multi-unit franchise ownership has increased recently, to the point that FranData has stated in another article that 50% of franchises are now in the hands of multi-unit owners. Darrell Johnson, the FranData CEO, has said the multi-unit franchising "is one of the industry's most dominating growth trends".
On the other hand, Eric Stites of the Franchise Business Review tells us that multi-unit ownership is not for everyone, and in fact, the multi-unit owner is a different breed entirely from your average franchisee:
"They typically don't have the capital to make it happen. That's why systems that are focused on multi-unit operations target a completely different individual -- someone with business ownership experience and/or executive level management experience and a good amount of capital.”
Research is essential before purchasing a franchise, be it a single franchise or a multi-unit. Read these articles here before making that big decision.