The President of Pure Barre on How To Attract Multi-Unit Franchisees

Multi-unit franchise ownership didn’t become popular until the last decade or so. But since the market crash in 2008, multi-unit franchising has become a stable — and popular — option for companies and individuals trying to protect and grow their wealth.

Under the multi-unit franchise model, one franchisee purchases the rights to develop, own and operate multiple units in an exclusive territory. 

To learn more about how franchisees benefit from multi-unit deals and how franchisors attract multi-unit franchisees, 1851 Franchise spoke with Sarah Luna, president of boutique fitness franchise Pure Barre. 

“Typically, a franchise partner purchases multiple units for a few reasons,” Luna explained. “To secure the rights for an entire area, therefore preventing another franchise partner from purchasing a neighboring territory, to have a great search area for sourcing and selecting estate, and to capitalize on the resources in the area. Additionally, a franchise partner will purchase multiple units to take advantage of the local nuances, such as traffic patterns, to ensure all clients are well-serviced within the areas of their business.”

So, how do franchisors attract franchisees to sign multi-unit agreements? According to Luna, it boils down to economies of scale. 

“Economies of scale can be realized with multi-unit franchise operations; it is important to share potential synergies with franchise partners so that they can weigh the benefits of a large scale operation versus a smaller one,” she said. 

“Further, a price discount for the development fee is a way to more easily attract franchisees to consider and buy more territories,” Luna added. 

To attract multi-unit franchisees, Luna says it’s important that franchisors put all of the necessary information on their franchise development sites so prospects can conduct their own research on the process. 

“Franchising is a very popular business opportunity and the landscape is competitive,” Luna said. “It’s important to provide details online so that prospective franchise buyers can learn enough about the investment opportunity and the business to be intrigued to inquire and enter into the due diligence process.”

Multi-unit ownership can hold many benefits for franchisees, especially when it comes to cost and profit: the larger the business, the more the cost savings, leading to increased profits. 

“When owning multiple franchise units, the franchisee can achieve economies of scale with many resources, including vendors, employees, marketing and business-to-business initiatives, as well as operational expenses,” Luna said. “For example, if one of their goals is to bring health and wellness to their community, like Pure Barre, their reach in achieving this is higher.”

For franchisees who are looking to become multi-unit operators, Luna cautions that the development schedule can be very aggressive. “Therefore, for franchisees considering this opportunity, it is imperative that they are well-capitalized and well-staffed so that all major timelines and milestones can be achieved.”