Coffee & Analytics: The Secret to Attracting Multi-Unit Franchisees

Attracting multi-unit franchisees requires more than just a good product and a strong brand — it demands a strategic approach to positioning, communication and growth. In a recent episode of “Coffee & Analytics”, Nick Powills — founder and chief growth officer of 1851 Franchise — shared valuable insights on how to successfully appeal to this high-stakes audience. Here's a breakdown of his key strategies.

Understand the Mindset of Multi-Unit Franchisees

Powills emphasizes the importance of understanding the buying behavior of multi-unit franchisees. These are not typical investors; they are strategic, capitalized and often looking for underperforming units to add to their existing portfolios. They are seeking:

• Profitability and Sound Investment: Multi-unit franchisees prioritize opportunities that are financially sound, with clear cost-to-entry figures and proven unit-level economics.
• Portfolio Expansion Potential: They prefer underperforming units that can be turned around and want flexibility in choosing their locations.
• Leadership Vision and Brand Differentiation: They want to see a clear point of differentiation and strong leadership vision, which helps them feel confident about scaling within the brand.

To effectively reach this audience, franchise brands should showcase profitability, leadership and unique selling points on their websites and in their franchise marketing materials.

Positioning Your Brand To Stand Out

Most franchise brands make the mistake of leading with their “why you, why now” messaging, focusing on their unique franchise opportunity. Instead, Powills suggests an “inverted pyramid” approach, where brands first highlight the additional resources and advantages franchisees receive. This shifts the conversation from “why this brand” to “how this brand helps me succeed.”

To attract multi-unit franchisees, brands should:

• Showcase Available Resources: Highlight direct financing channels, operational support and any tools that make scaling easier.
• Leverage Existing Success Stories: Promote stories of current franchisees who have successfully scaled, particularly if they are multi-unit operators. This peer validation is powerful in convincing potential investors.
• Package Potential Resales: Market potential resales as multi-unit packages to attract franchisees looking for portfolio expansion.

Where Multi-Unit Franchisees Get Their Information

Understanding where multi-unit franchisees get their information is crucial to targeting them effectively. Key channels include: 

• LinkedIn and Facebook: While franchisees may not click on direct ads, they are open to educational content and videos shared through their networks.
• Next Best Lists and Industry News: Many franchisees discover new brands by Googling “top emerging brands” or by reading industry trades and franchise news sites.
• Peer Recommendations: Multi-unit franchisees often consult other franchisees when exploring new investments, making peer validation a vital component of a successful marketing strategy.

Powills also stresses the importance of having a “steady drumbeat” of signings, openings and milestone announcements on LinkedIn and other industry news platforms.

Smart Growth Strategy: Start Small and Scale

A counterintuitive but effective growth strategy for brands looking to scale is to award single units with the option to expand, rather than awarding large territories upfront. This approach ensures that franchisees prove themselves with one unit before scaling, minimizing risk and preventing stalled growth due to blocked territories.

Key recommendations include:

• Award One, Prove Performance, Then Scale: Give well-capitalized franchisees the first right of refusal to expand once they prove strong performance and key performance indicator (KPI) achievement.
• Avoid Overselling Territories: Overselling territories can freeze growth if franchisees underperform or fail to scale.
• Create a Multi-Unit Growth Path: By allowing franchisees to gradually expand, brands can organically grow their multi-unit operations without relying on high-stakes “whale” franchisees.

This strategic growth path balances ambition with caution, ensuring sustainable expansion.

Keep It Simple and Focus on Profitability

Powills emphasizes the importance of simplicity in the business model. Multi-unit franchisees are interested in simple operations, clear profitability metrics and scalability. He cites the example of Alloy Personal Training, which maintains a streamlined operational model with a clear cost structure, making it an attractive investment opportunity.

Key takeaways for brands include:

• Focus on Cost and Profitability: Multi-unit franchisees prioritize straightforward cost structures and clear profit margins.
• Emphasize Return on Royalty: Powills introduces the concept of “return on royalty,” encouraging brands to showcase the tangible benefits franchisees receive for their royalty payments.
• Build a Culture of Growth: Brands should highlight continuous growth and franchisee success stories, showing how they support franchisees in scaling their businesses.

Invest in Performance, Not Just Size

Chase franchisees who perform above average and have enough capital to scale rather than chasing “whale” multi-unit operators who may not align with the brand's culture or growth strategy. This targeted approach ensures sustainable growth while maintaining the integrity and culture of the brand.

By focusing on profitability, strategic growth and effective communication, franchise brands can attract the right multi-unit franchisees who will grow with the brand for the long term.

Watch the full video above or on YouTube. 

To learn more from recent episodes of “Coffee & Analytics,” check out these stories on 1851 Franchise:

• Coffee and Analytics: AI Can Supercharge Your Franchise Content Marketing
• Coffee and Analytics: Do Younger People Buy Franchises Faster?
• Coffee and Analytics: Should You Ever Invest in a Franchise Expo?