If you’re thinking about expanding into multi-unit franchise ownership, you’re in good company. According to industry experts, the number of multi-unit owners has increased steadily over the past couple of decades. Today, multi-unit operators own about 53 percent of all franchised businesses and over 76 percent of franchised restaurants in the United States.
Factors to Consider about Multi-Unit Food Franchise Opportunities
There are good reasons why increasing numbers of franchisees are opting for multi-unit ownership. Opening additional franchise locations provides a boost in earning potential, more effective use of advertising dollars, and economy-of-scale savings on products and necessary supplies. Once you get your first unit up and running, you’ll find it easier to set up, manage, and market each additional location. Owning multiple units also provides a buffer against slow periods and economic downturns that can have a negative impact on your profitability if you only have one unit.
Owning and operating multiple franchise locations isn’t without challenges, though. Here are some considerations to help you decide if you’ve got what it takes to be a multi-unit owner.
Assess Your Multi-Tasking Abilities
Owning two or more franchise units takes a different skill set from operating just one location. Single-unit owner-operators typically handle most day-to-day aspects of their business, like ordering supplies, scheduling employees, and interacting with customers. Owners who take on multiple food franchise opportunities assume more of an oversight role and hire managers to run the individual locations. As a multi-unit owner, you’ll have greater responsibility, more staff to oversee, and the stress of delegating your old role while being the go-to person for all of your locations.
Have a Plan in Place for Future Financing
Franchisors who award multiple locations to one franchisee usually incorporate an expansion schedule into the deal, which means you’ll be expected to open your additional locations within a specific timeframe. To stay on track, you should have a funding strategy in place to cover the costs of getting each new store up and running, such as the build-out, equipment, supplies, utilities, insurance, and advertising, and also to maintain adequate cash flow to cover payroll and everyday expenses.
Take a Close Look at Your Risk Tolerance
The amount of financial risk you’ll assume increases with each franchise location you open. Before you take the plunge, make sure you have deep enough pockets and the fortitude to handle the additional stress that comes with borrowing and owing larger amounts of money.
Fine-Tune Your HR Skills
Hiring, training, and managing staff is fairly easy when you have just one location to operate. With multiple locations, you’ll need to hire a manager you can trust to run the business to the standards you expect. You’ll also need to develop a recruitment and training strategy that your managers can implement to build a great team of employees at their locations.
Decide Whether to Stay with One Brand or Diversify
When you’re considering multi-unit franchise ownership, give some thought to whether you’d prefer to open different locations of a single brand or branch out. Some established franchise companies manage several concepts and offer co-branding opportunities that are worth investigating.
Consider Where You Want to Expand
There are usually several options available for multi-unit expansion, and an experienced franchisor can advise you on what territories are available and help you decide whether to open all your stores within a single major city or in a larger defined area that’s less densely populated.
If you’d like to learn more about the multi-unit food franchise opportunities available with Marble Slab Creamery, contact us today!