Why Multi-Unit Ownership Takes a Certain Kind of Franchisee

Franchising is not for the faint of heart, and it is widely recognized as a route for ambitious entrepreneurs to take control of their professional and financial futures. While multi-unit owners account for over 225,000 franchise units in the U.S., less than 20% of franchisees own multiple units.

“Here's the reality: one unit is busy, but having multiple units is valuable,” John Francis, a multi-unit franchisee, told 1851 in a June interview. “It's not easy, but you can really leverage your opportunities and manage the risk. I think it's strategically a good way to go, but you need time, money and talented people.”

The ability to successfully own and operate a single unit is not something to brush aside, but the amount of mental energy, dedication and sheer time required grows exponentially as a single franchisee’s unit count increases.

One of the biggest hurdles for many franchisees who expand to multi-unit ownership is the concept of letting go a bit. While the franchisee should still be involved, they will have to hire managers, operational experts, trainers and more. As the team grows, there is no way for a single franchisee to manage all of the working parts.

“When you have multiples, you have to put somebody else in charge. If you get a good manager who can run 90% of the front end, that's how you scale,” Francis said. “There are only so many hours in the day and so much you can only do physically. You have to have people, and you have to have good systems.”

Often, veteran franchisees and operators succeed in multi-unit deals because they have spent time developing their skills while owning and operating a single unit. However, a long track record of franchising success isn’t necessarily a prerequisite for succeeding as a multi-unit owner. Franchisees who understand and are prepared to commit to the demands of multi-unit development can succeed by working in conjunction with qualified, caring franchisors.

Another crucial aspect of the process a franchisee should consider is franchisor support, including a prospective development schedule. In many cases, signing a multi-unit franchise agreement does not commit the franchisee to open five, 10 or 20 units all at once. Many franchisors will present a time span within which all units in the agreement should be opened.

When a franchisor can present this sort of plan, it demonstrates an awareness of the multi-unit process and an ability to work with franchisees in a reasonable manner to complete development. With a plan like this available, the franchisor has likely also developed other support systems to ensure its multi-unit franchisees are successful.

Ultimately, when approaching multi-unit franchising, a great deal of balance is necessary. The franchisee must be committed to a long-term development plan and willing to put in the work necessary to scale the business, but they cannot be so controlling that they are unable to delegate and trust processes that have previously been proven to be trustworthy.