From strong support to reduced fees, local owners are looking for a few factors when deciding whether or not to take on multi-unit ownership.
In order for franchise brands to be successful, they need to maintain a consistent level of growth. But achieving that isn’t completely contingent on bringing new franchisees into a brand’s system—expansion efforts can also be realized through existing owners taking on more locations. However, multi-unit operators aren’t a sure thing for franchise brands. There are some features and systems that franchisors need to have in place in order for local owners to feel confident enough to expand.
For Todd Geatches of Rocky Top Management, Inc., the decision to take on multiple Toppers Pizza locations stemmed from the brand’s support system. From the brand’s overall operations all the way to its founder, Scott Gittrich, Geatches says that they wouldn’t have invested in Toppers at all—let alone signed an agreement for multiple locations—without knowing that the brand was behind them.
“We researched many companies before deciding on Toppers, and one important factor that fueled our decision was support. Toppers is not a large chain yet, but we are poised to grow with quality people who know pizza and are passionate about the brand,” said Geatches. “So far, we’ve opened six Toppers locations in two states over the course of four months. We could not have done it without the incredible support of Scott and the team he’s assembled in Whitewater, Wisconsin.”
Another incentive that franchisees search for when it comes to multi-unit expansion is flexibility. There are a lot of costs associated with launching a business, so franchisees need to know that they have a little bit of wiggle room when it comes to the type of location that they’re going to open. Multi-unit Sylvan Learning franchisee Chris Pittner, for example, was inspired to grow alongside the brand because of its varying center sizes.
“We were looking for a company that was flexible with center size and location since rent is a large fixed cost. We also wanted an established brand which has a sophisticated online marketing approach. Finally, we were looking for a brand that provides strong franchisee development and support,” said Pittner. “Sylvan provides all that, and our experience has been very positive. In fact, we quickly grew to 13 locations because our centers have been profitable and the territory size is large enough to where you will not have competition from another Sylvan location.”
Beyond strong support, flexibility and a strong territory, financial requirements are also one of the top incentives that franchisees look for before adding another location to their roster. Whether a brand offers reduced royalties or franchise fees, a little bit of savings has the potential to go a long way.
“From time to time, Sylvan has reduced or waived the franchisee territory fee to existing franchisees looking to expand. This is a good practice as it can lower up-front costs and make it easier to get a center open,” Pittner said.
But incentives alone aren’t enough to convince a franchisee that multi-unit ownership is the best choice for them. At the end of the day, it comes down to their confidence and faith in the brand that they want to grow alongside with.
Geatches said, “There are several companies using gimmicky incentives to entice potential franchisees to invest in their concept, and we passed on all of them. We were focused on quality, passion and core values that we truly believe in, and we found it with Toppers. That’s what ultimately inspired us to pursue multi-unit ownership.”