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Weighing up multi-unit ownership

Picture this dreamy scenario: you’re a prospective franchisee with plenty of capital. You’ve got the backing of banks and a few investors to boot. You’ve got a business concept that is 99% certain to succeed. And best of all, you’ve discovered a large area with a great need for your service. Your inner franchising voice is telling you one thing: open a multi-unit franchise.

Don Daszkowski, who writes an excellent blog on the subject of franchising at, has been wrestling with the pro’s and con’s of multi-unit ownership lately. Given the well-documented difficulties on the credit market at the present moment, not every prospective franchisee is thinking big, but nonetheless, it's important to know the risks and benefits of multi-unit ownership if you are about to invest.

Daszkowski’s general advice is to urge franchisees against multi-unit ownership, unless they possess experience running larger operations. The first thing every franchisee must do is their homework. He also details the job demands of a multi-unit owner. Because of the scope of the operation, they are forced to run the units from a distance, at a macro level. This is somewhat different from the regular franchisee experience, which tends to be more caught up with the day-to-day, nitty-gritty obligations of business-ownership.

Start small is some other advice. See how you fare owning one unit and if you are really successful, then perhaps a second or third franchise will suit you.

Daszkowski shared his feelings on the industry with Entrepreneur magazine for their latest issue, as did Liberty Tax Service franchisee, Dan Castellini. The 33-year-old owns 10 Liberty Tax Service franchises. Experience has taught him what works and what doesn’t in multi-unit ownership.

“The No. 1 reason people fail going from one to two or multiple units is they tend to have an emotional connection to that original location. It’s their baby--and that doesn’t work. You’ve got to empower people at the first store and then spend as much time and energy getting that second location off the ground as you did with the first.”

A clear mind, versatility and an ability to see the bigger picture are all vital attributes when you’re making the leap into multi-unit ownership. It seems obvious enough, but try one franchise first and see how you fare. If you’ve found the business for you, the franchising system allows you to plant that system wherever you’d like.

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