Growing a Franchise
What Makes a Multi-Unit Franchisee Buy?
Multi-unit franchisees are often the Holy Grail for franchise developers, so knowing how they think and why they buy is crucial for franchisors.
In the world of franchising, an industry ripe with successful entrepreneurs and forward-thinking business people, there are those that choose to take things to the next level by buying more than one franchise. These ambitious multi-unit franchisees are often the Holy Grail for franchise developers, so knowing how they think and why they buy is crucial for franchisors.
Greg Cutchall, CEO and founder of Omaha, Nebraska based Cutchall Management Co., is a big player in the franchise world with 50 franchise locations across 9 different brands, and he has some advice for potential multi-unit franchisees and franchisors alike.
According to Cutchall, whose portfolio currently boasts Sonic, Dominos, Paradise Bakery, Famous Dave's, Lolos Chicken & Waffles, Burger Star, First Watch, Tin Star Taco Bar, and Jams American Grill, there are a number of factors he considers before buying into a new franchise.
“Success and track record of the company, the franchisee support system, return on investment, and the way the brand fits with our corporate structure,” said Cutchall. “These are just a few of the many things I factor in when considering a new brand.”
If there is one insight franchisors should take from a big multi-unit franchisee like Cutchall, though, it is that they should expect to be dealing with a savvy investor and that an outbound approach is unlikely to work.
“I am usually sold on the concept before I contact someone about a franchise,” said Cutchall. “For every franchise I have ever bought I had a location in place or picked out before I even called.”
“At the end of the day it's about good chemistry and good business ethics,” Cutchall said. “For example, I would question any restaurant franchise that would sell a franchise to someone who has never been in the restaurant business. That is a recipe for failure.”
When it is all said and done, big multi-unit franchise owners are going to be looking past a catchy sales pitch into the heart of the business by speaking with current franchisees and doing due diligence on all aspects of the brand.
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About the Author
Nick Powills
FollowNick Powills, CFE, founded No Limit Agency in 2008 and serves as Chief Brand Strategist for the Chicago-based firm. No Limit is a full-service communications agency that establishes and elevates brands by bridging Public Relations, Social Media, Marketing, Advertising, Digital, and a lot of creativity, to best strategize well-rounded and successful campaigns for 50+ global franchise brands. By presenting visionary ideas and building real relationships, No Limit is able to create effective media branding strategies to help companies grow. Nick currently leads a staff of writers, media strategists, designers, social media experts and digital producers in an office think-tank where brands are humanized for strong, compelling media stories. Prior to starting No Limit at the age of 27, Nick spent four years working at a franchise PR agency where he mastered the art of building rapport with media outlets and creating newsworthy pitches for earned media placements. He holds a Bachelor of Journalism from Drake University in Iowa.
