You may have decided to buy a franchise , but you’re far from done with the decision-making. Not only will you have to determine which industry is a good fit for you , but also which brand you feel the most aligned with .
And we’re still not done!
You may not have realized that there are different types of franchisees. While you might not need to decide that you want to expand before you buy your first franchise, it’s a good idea to be aware of what opportunities lie ahead for you down the road.
Type 1: Single-Unit Operator
This is the most common type of franchisee. If you own and operate just one location of a franchise, you qualify as a single-unit operator. The benefit is that you can completely focus on this one business, and your time isn’t divided among multiple locations. If you plan to act as manager, it’s easier to have a handle on one location than several.
Still, if, after a while, you decide you want more in your franchising empire, you might consider one of the following types.
Type 2: Multi-Unit Franchisee
Just like in the game Monopoly, the more properties you own, the more lucrative the opportunity. Multi-unit franchisees operate multiple locations in one area (in a city or maybe county of a rural area). In addition to the increased revenue potential of owning multiple franchises, a multi-unit franchisee can benefit from reduced training costs, because he can spread those across all locations.
If this option is appealing, you would sign a development agreement for the geographic area you want to develop, and then a separate franchise agreement for each location.
Type 3: Master Franchisee
Congratulations, Grasshopper. This is the cream of the crop in terms of franchising goals. As a master franchisee, you basically become a mini-franchisor. While you may open multiple locations, you will find franchisees to pay for the privilege of operating them.
The perk? You aren’t responsible for operating the multiple locations, and you can collect a unit franchise fee, as well as a share of the royalties. It’s a fantastic way to help a franchise expand without having to manage the day-to-day operations of a location.
Hopefully this didn’t intimidate you! Even if you start out as a single-unit operator now, you can see that there are opportunities for growth for you as you find your rhythm with your first franchise.
Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.