1851

In the world of franchising, there is no “one size fits all” approach. Some business owners are just starting their entrepreneurial journey, while others have a growth-driven mindset to multiply their portfolios. For the latter, multi-unit agreements are an excellent way for them to achieve their goals of expanding. It’s also very beneficial for the companies themselves to grow internally.&nbsp;“Franchisors really want multi-unit franchisees because they are getting somebody who has a ton of built-in resources that can help their brand grow in the right way because they are already familiar with it,” said&nbsp;<a href="https://www.linkedin.com/in/joshuakovacs?utm_source=1851franchise.com&utm_medium=article&utm_campaign=franchising-expert-explains-why-brands-want-to-attract-multi-unit-franchisees-2720498" target="_blank" rel="nofollow">Joshua Kovacs</a>, CEO of Oakscale Franchise Development and multi-unit owner of PetWellClinic and Xpresso Delight USA locations. “And the trade-off is that they are spending less money on support than having to train a bunch of individual owners or single-unit franchisees.”The benefit also extends to franchisees, who are already experts on the company, so the “best thing is just to double down on the brand you've already mastered and open more locations,” Kovacs explained. One of the reasons business owners will sign for multiple units upfront rather than one at a time is because fast-growing companies can run out of territories, and someone else may sign on for a neighboring region they had been eyeing.&nbsp;There is also an advantage to signing franchise agreements earlier because deal terms tend to become more aggressive over time as a brand grows. The first few franchises typically can secure larger areas for cheaper, and then things get more nuanced as the franchisor becomes more sophisticated, Kovacs explained.&nbsp;&nbsp;In order to attract these types of business owners willing to make large investments upfront and take on risks to lock down territory rights, brands must have a detailed multi-unit development agreement drafted.&nbsp;“Franchisors can set up a multi-unit strategy and talk through that as part of their sales process. They need a multi-unit development agreement that goes beyond that franchise agreement if they are going to sell to multi-unit operators,” said Kovacs.&nbsp;Some businesses will pre-define territories in packs of three, five or 10, while others have terms that are more open-ended and up for discussion during the agreement process. This is how franchise owners can sign on for multiple at once and lock in the locations while paying over time.“They would effectively work out a deal where they sign a franchise agreement and pay a franchise fee for that first agreement but are also signing a development agreement to take down all of that city,” said Kovacs. “And the development agreement will typically have deal terms about what the market is, how many franchise fees are being paid upfront, and what their development terms are.”“If they're getting into a franchise for $500,000 and they pay an incremental $200,000 or 300,000 more to lock down territory rights that go well beyond that unit, it tends to make a lot of business sense to do so,” he added.

Multi-Unit Franchising Benefits | Franchising Expert | 1851 Franchise

1851 Franchise

Multi-brand owner and franchise development group CEO Joshua Kovacs breaks down the mutual benefits for both sides of the contract. 

Franchising Expert Explains Why Brands Want to Attract Multi-Unit Franchisees 

franchising-expert-explains-why-brands-want-to-attract-multi-unit-franchisees

HomeTeam Inspection Service

Photo of HomeTeam inspector in red polo and khaki pants, walking by branded vehicle

Real Estate Today: Behind the Drywall: The Truth About Home Inspections

purpose-of-home-inspection

Dog Training Elite

Dog Training Elite Franchise - DTE - National Service Dog Month - 1851 Franchise

Celebrating Service Dogs: Why Proper Training Changes Lives — And How Dog Training Elite Is Leading the Way

dog-training-elite-national-service-dog-month

Senior Care Authority

How This Senior Care Authority Franchisee Turned Love for His Grandparents Into a Lifelong Calling

how-this-senior-care-authority-franchisee-turned-love-for-his-grandparents-into-a-lifelong-calling

Hometown News: Like Father, Like Son — Family-Run Inspection Business Blends Generations of Expertise and a Keen Eye for Detail

father-son-home-inspection-franchise-florida

KLA Schools

KLA Schools of Beachwalk Hosts Admissions Kick-Off Celebration

kla-schools-of-beachwalk-hosts-admissions-kick-off-celebration

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Potbelly to be Acquired by RaceTrac in $566 Million Deal 

racetrac-acquires-potbelly-in-566-million-deal

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities - 1851 Franchise Agg

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities 

health-care-hiring-slowdown-in-home-care-franchise-opportunities

Caribou Coffee Names Scott Kennedy CEO, Eyes Continued Growth

caribou-coffee-names-scott-kennedy-ceo-eyes-continued-growth

McDonald’s Launches New Extra Value Meals as Consumer Demand for Value Continues to Climb

mcdonalds-launches-extra-value-meals

Power Eats: Smoothie King Rolls Out Food Nationwide To Fuel Franchise Growth

smoothie-king-food-menu-power-eats

DevHub - Meet the Supplier - 1851 Franchise

DevHub: Scalable Digital Marketing for Franchises and Multi-Location Brands

devhub-meet-the-supplier

Mike Revak - Chief Business Officer - Sky Zone - Franchise Marketing Leaders - 1851 Franchise

Top 25 Franchise Marketing Leaders: Mike Revak — President and Chief Business Officer, Sky Zone

top-25-franchise-marketing-leaders-mike-revak-chief-business-officer-sky-zone

Top 25 Franchise Marketing Leaders: Cathy Chavenet — Chief Marketing Officer, Paris Baguette

top-25-franchise-marketing-leaders-cathy-chavenet-chief-marketing-officer-paris-baguette

What It Really Feels Like To Franchise Your Business

what-it-really-feels-like-to-franchise-your-business

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

1851 Keyword - The Secret To Succeeding With a Part-Time Franchise Is Picking the Right Model

The Secret To Succeeding With a Part-Time Franchise Is Picking the Right Model

part-time-franchises-picking-the-right-model

Franchisee spotlight graphic with photo of Ricki Oberoi and Layne's Chicken Fingers logo

Multi-Unit Wendy’s Operator Signs 12-Unit Deal With Layne’s Chicken Fingers

ricki-oberoi-laynes-chicken-fingers-growth

Design with school-aged child standing on pencil with text "Education Franchises" and "<$500K"

Top Education Franchises Under $500K To Explore in 2025

top-education-franchises-under-500k

1851 Franchise Deep Dive graphic with Sparkle Squad logo

Sparkle Squad Franchise Costs, Fees, Profit and Data for 2025

franchise-deep-dive-sparkle-squad-franchise-costs-fees-profit-and-data

Franchising Expert Explains Why Brands Want to Attract Multi-Unit Franchisees

MORE STORIES LIKE THIS