What Makes a Multi-Unit Franchisee Buy?

Multi-unit franchisees are often the Holy Grail for franchise developers, so knowing how they think and why they buy is crucial for franchisors.

By Nick Powills1851 Franchise Publisher

SPONSOREDUpdated 12:12PM • 12/15/15

In the world of franchising, an industry ripe with successful entrepreneurs and forward-thinking business people, there are those that choose to take things to the next level by buying more than one franchise. These ambitious multi-unit franchisees are often the Holy Grail for franchise developers, so knowing how they think and why they buy is crucial for franchisors.

Greg Cutchall, CEO and founder of Omaha, Nebraska based Cutchall Management Co., is a big player in the franchise world with 50 franchise locations across 9 different brands, and he has some advice for potential multi-unit franchisees and franchisors alike.

According to Cutchall, whose portfolio currently boasts Sonic, Dominos, Paradise Bakery, Famous Dave's, Lolos Chicken & Waffles, Burger Star, First Watch, Tin Star Taco Bar, and Jams American Grill, there are a number of factors he considers before buying into a new franchise.

“Success and track record of the company, the franchisee support system, return on investment, and the way the brand fits with our corporate structure,” said Cutchall. “These are just a few of the many things I factor in when considering a new brand.”

If there is one insight franchisors should take from a big multi-unit franchisee like Cutchall, though, it is that they should expect to be dealing with a savvy investor and that an outbound approach is unlikely to work.

“I am usually sold on the concept before I contact someone about a franchise,” said Cutchall. “For every franchise I have ever bought I had a location in place or picked out before I even called.”

“At the end of the day it's about good chemistry and good business ethics,” Cutchall said. “For example, I would question any restaurant franchise that would sell a franchise to someone who has never been in the restaurant business. That is a recipe for failure.”

When it is all said and done, big multi-unit franchise owners are going to be looking past a catchy sales pitch into the heart of the business by speaking with current franchisees and doing due diligence on all aspects of the brand.