Simply put, multi-unit franchising is when a franchisee owns more than one franchise outlet. Although this is usually with the same brand it can also be with a completely different franchise system.
Multi-unit franchising is on the rise. According to research by the British Franchise Association (BFA), 36% of UK franchisees now run multiple units, which represents an increase of 7% from their previous survey three years prior.
While broaching out into multiple units can offer huge upside potential in the way of additional revenue streams and growth, it’s certainly not for every franchise owner. Before embarking on the road to multi-unit franchising, ask yourself the following questions. If your answer is ‘yes’ to all of the below, then it could be time to scale.
Do you have a firm grasp on your existing store?
It should go without saying that your current unit should be a well oiled machine before another unit is considered. Do you fully understand the cadence of your franchise model and how everything works? You’ll need to know all the tricks of the trade before venturing further into this space.
Do you have enough capital?
Adding more units to your portfolio will naturally require more investment. Do you have the capital that expansion necessitates? Will you be able to get enough finance through lenders? This is where having a carefully considered business plan will be essential to your success.
Are you willing to take on more risk?
With more investment there comes more risk if the venture fails. Do you have the stress threshold required to shoulder this much responsibility?
Do you have the right skill set?
Although sharing some similarities, the single-unit and multi-unit business models are very different. They require different skill sets, personalities and life goals; someone who is adept at managing a single-unit franchise might struggle to run several units, and vice versa.
To run a successful multi-unit franchise you will need to have strong leadership skills in order to build, manage and motivate large teams of managers and workers across multiple locations.
Do you have the right team alongside you?
Running a successful multi-unit franchise requires you to delegate more in order to focus on the bigger picture. You’ll need people who share your work ethic and devotion to the business and are adequately compensated. Do you already have a solid team from which you can promote internally? If not you will need to look at hiring externally.
Do you have the right customer base?
This may sound obvious, but is there enough customer demand for your product or service to warrant expansion? Have you fully researched the market and the locations you are looking to expand into?
Not sure? Speak to your franchisor
Your franchisor is an invaluable asset to scaling your portfolio. You might be unsure whether you can do this alone, and you don’t have to. It’s in the franchisors best interest that you succeed. Their knowledge and experience working with multi-unit operators can be passed on to you, so leverage as much as you can from a support network that is unique to the franchising industry!