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Multi-unit Franchise

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Multi-Unit Franchising is the New Thing
02.05.2016 17:01

First off, if you don't know what a multi-unit franchise is- it's probably what you're thinking. It's a franchise with more than two units. There are two different types of multi-unit franchises. The first one being sequential multi-unit franchising, which the franchisor gives the franchisee the option to open additional units, but each unit needs to be under a separate contract. The other one is known simply as area development, which is where the franchisee is expected to open up a certain number of units within a given time frame. 

The other type of main franchises is referred to as single-unit franchises. I'm sure you can guess what that is, but I'm happy to give it away just in case. Single-unit is where you want to be when you're first starting out down your road to entrepreneurship. Basically, the franchisee is responsible for only operating just one unit. Usually, multi-unit franchises are for people that have experience in running a business or maybe even a single-unit franchise in the past. As of late- the amount of multi-unit franchises has been skyrocketing over the course of the last few years. It used to be considered fairly rare, but nowadays many successful companies will only deal with multi-unit franchisees. These days multi-unit owners are controlling 79 percent of all franchised restaurants. That's insanely impressive considering just four years ago they only had a grasp on 55 percent. Why such a drastic change you may ask- well franchisors mainly want to minimize the risk by liquidating their company-owned stores and they also were doing everything that they could to avoid Obamacare because we all know it's a lot easier to collect fees and royalties than to hand it all over to the government. They have tried running the numbers- and unless they added units it could end up disastrous to any business who has more than about 50 employees and/or in the quick service business. 

A multi-unit owner with a whopping 20 years of experience, Elizabeth McGill, was asked what she were to say if she were to give advice to new entrepreneurs and she said there are only really six things you have to always remember: assess yourself, have a lot of patience, assess your franchisor, find a support system, build a strong team, and definitely do not expand too quickly. According to her, if you can follow these rules you are setting yourself up perfectly for success.

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