How to Own Multiple Franchises
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Multi-Unit Franchise: How to Own Multiple Franchises
When it comes to growing your wealth, owning multiple franchises is a great path to bigger professional and financial success. It’s simple logic that the more locations you have, the more potential you have to increase your revenue, both for your franchises and personally. But before you run out looking to bulk-purchase franchises, it’s important to do your homework and make sure you’re ready to scale up your business. Let’s take a closer look at the potential benefits of multi-unit franchise ownership, as well as what it takes to do it right.
Crunching the Numbers
Many entrepreneurs can attest to the effectiveness and profitability of multi-unit ownership. According to Franchise Update Media’s March 2023 Multi-Unit Franchise Buyer’s Guide, several industries are dominated by multi-unit owners. These include:
- Quick-service restaurants (QSRs) – 81.93%
- Beauty-related – 78.42%
- Sit-down restaurants – 66.34%
- Real estate – 56.83%
- Automotive – 55.28%
With multi-unit owners controlling the majority of franchises in various industries, it stands to reason they get the lion’s share of the revenue. According to a January 2024 report from Statista, the economic output of franchises in the U.S. alone in 2022 was $825.37 billion. Also, analysts forecast the 2023 economic output numbers, once finalized, will come in at $860.14 billion.
The Potential Boons
As an entrepreneur who's navigated the waters of franchising, you’re no doubt able to appreciate when a franchise offers unique advantages. As it happens, multi-unit ownership has unique advantages of its own. If you're looking to grow your franchise portfolio, this approach is like hitting the accelerator on your business's potential. Here are some of the benefits of starting a multi-unit franchise that have really stood out:
Increased Profit Potential
It might sound a bit straightforward, but it's true; expanding into multiple franchise locations does wonders for your sales and revenue. Think of it as casting a wider net; you're reaching diverse markets and customer groups with each new unit. This not only brings in more stability but also ups the profit game significantly. It’s like planting multiple seeds — each one grows and contributes to a stronger, more fruitful garden.
Another big win for a lot of multi-unit franchise owners has been streamlining all those behind-the-scenes tasks across franchises. Handling advertising and marketing for several locations in one go not only saves time and effort but also keeps branding consistent and strong. The real kicker? By pooling together these needs, franchisees can negotiate much better deals, getting more bang for their marketing bucks.
Let’s talk savings. Many franchisors offer sweet deals on startup costs or franchise fees when you sign up for multiple units — a bit like a bulk-buy discount. These savings can be a real game-changer, making it more feasible financially to expand operations without breaking the bank.
Sharing resources between locations is another perk that a franchisee like yourself may find very impactful. From staff to equipment, being able to shuffle things around as needed helps keep operational costs down and efficiency up. Plus, having a unified supply chain for all your units can give you better leverage in negotiations, trimming down costs even more.
Lastly, a great aspect of multi-unit franchising is being able to set up each unit to run smoothly with minimal daily oversight. This freedom can allow you to focus more on big-picture strategies and growth. Having a reliable team in place to manage the day-to-day while you plot the course forward is a business luxury that’s hard to beat.
Getting into multi-unit ownership can be a powerful way to grow as a franchisee. The combination of increased sales, streamlined operations, financial benefits, shared resources, and the freedom to focus on expansion makes it a truly compelling option for any entrepreneur looking to scale their business and make a significant impact in their chosen industry.
Keys to Success
Becoming a multi-unit franchise owner is an ambitious and strategic business move. It requires careful planning, sufficient resources, and a keen understanding of the franchising model. For businesspeople like you considering the purchase of multiple units within the same franchise, here are some important steps toward success and sustainability in this endeavor:
Assess Your Readiness
It’s crucial to evaluate whether owning and operating multiple franchise units is the right path for you. This assessment involves understanding the demands and challenges of managing multiple sites. It requires not just financial readiness but also the capacity to handle increased operational responsibilities. You need to be sure you’re prepared for the complexities of putting together a solid management team, streamlining operations, and maintaining consistent service and quality across all units.
Meeting Franchisor Requirements
Each franchisor has specific requirements for franchisees who wish to own multiple units. These requirements often go beyond financial capabilities and include operational expertise, business acumen, and a track record of success. Ensure that you thoroughly understand and can meet these criteria before committing to a multi-unit franchise agreement.
Capital, Real Estate, Skills, and Staffing
Securing sufficient capital is essential for covering the initial investment and ongoing operational costs of multiple units. Additionally, access to suitable real estate is critical. The locations you choose should align with market research and the target demographic of the franchise.
Having the right skills is another vital aspect. This includes leadership, management, strategic planning, and an in-depth understanding of the franchise model. Equally important is ensuring you have the staffing resources to operate multiple units effectively. This involves hiring competent staff and, crucially, finding capable site managers.
Effective, Efficient Management
The backbone of successful multi-unit operations is an effective management team. Site managers play a pivotal role in overseeing daily operations, ensuring each location runs smoothly and meets the franchisor's standards. Make sure you invest time and resources in selecting and training these managers.
You may be eager to get all your locations up and running, but trying to start all your planned locations at once can result in dealing with the growing pains of a new franchise multiple times over. Maintaining a steady, manageable pace is key. Ideally, aim to open the first location within nine months of signing the franchise agreement. Each subsequent location should ideally open within 14 months of the previous one. This timeline allows you to apply learnings from each opening, adjust strategies as needed, and ensure each new unit is set up for success without overextending your resources.
Becoming a multi-unit owner is a significant undertaking that requires careful preparation, adequate resources, and strategic planning. By ensuring readiness, meeting franchisor requirements, securing necessary capital and real estate, assembling a skilled management team, and pacing your expansion thoughtfully, you can effectively grow your franchise operations and achieve long-term success.
Rise to New Franchising Heights with Altitude
We’re eager to have you on the Altitude franchise team. We’re a growing indoor trampoline park franchise with available markets in numerous states, with plenty of opportunities for ambitious franchisees to open multiple locations. Fill out a franchise form today to learn more about your franchising opportunity with Altitude.