Multi-Unit Owners Continue to Be a Hot Commodity in Franchise Industry

Citing figures from FranData, Entrepreneur Magazine recently reported multi-unit franchisees currently own 53 percent of the 450,000 franchise units across the U.S. More importantly, this is a number franchisors would like to see grow further.

While multi-unit franchise ownership used to be a rarity, it has grown significantly over the past 10 years, with many franchisors now tailoring their models to appeal to multi-unit buyers. This is clear in the restaurant franchise market, where multi-unit owners control 76.5 percent of franchised restaurants, according to Entrepreneur.

While there are various reasons for this shift, one factor commonly cited by franchisors is The Great Recession. Not only were single-unit operators struggling while multi-unit owners stood fast, it became much more difficult for prospective business owners to secure financing.

Sandwich chain Which Wich is just one example of brands focusing on multi-unit franchisees. However, the brand has also implemented its own spin on the process, offering a two-store commitment to all franchise partners. Owners who are able to open two stores within two years will then be allowed to develop additional units.

“It gives us a level of comfort,” Jeff Vickers, senior vice president of development for Which Wich, told Entrepreneur. “When an operator gets their stores open, we know if it’s someone we want to continue with for the long term. It’s a win-win for us and for the franchisee. A lot of franchisors make big deals that never get developed. We want to make sure we’re being realistic and that we’re moving collectively in sync at a reasonable pace. Some franchisees will be happy with two units, some with five, some with 20 or 50. We want them to find a level they’re comfortable with.”

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