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Single-Unit Franchising vs Multi-Unit Franchising: Which option is right for you?

 

To some, owning and operating one franchise location sounds like an exciting and fulfilling endeavor.  To others, simply owning and operating one franchise isn’t the endgame and they have the desire to own multiple units.  Whichever category you fall in, it is important to determine which avenue is right for you.

Multi-unit franchising has become more popular in recent years, particularly among fast-food chains, and is a growth strategy where franchisors sell franchisees the opportunity to open multiple units at the outset, as opposed to just one.  Depending on the franchisor, purchasing multiple units at once may come at a discounted price but the Franchise Agreement may contain strict time constraints for opening those units and/or require a certain number of units be purchased.  As such, it is important to fully understand all of the requirements and obligations associated with being a multi-unit franchisee.  Some franchisors provide the opportunity for people to become area developers whereby they are required to open a certain number of franchises within a specified area within a certain amount of time.  To learn more about what an area developer is and the potential benefits and pitfalls of being an area developer, tune into this episode of Franchise Euphoria: Should I be an Area Developer for my System?

You may be thinking to yourself, “Isn’t opening one franchise hard enough? Why would I want to be a multi-unit franchisee from the beginning?”  This is a fair question and opening one franchise is by no means an easy task and takes hard work, dedication and time to become profitable.  Multi-unit franchising requires those things as well, but channeled in a bit of a different way.  For example, with one franchise location, you will likely be actively involved in the business, managing the day-to-day operations and making sure everything runs smoothly.  With multiple outlets, you will need to actively recruit managers to handle the day-to-day operations at your different locations and supervise those managers.  In order to be a successful multi-unit franchisee, it is important to be comfortable with letting someone else manage and operate the business while you supervise the operations from afar.  This is just one example of how owning and operating one franchise differs from being a multi-unit franchisee.  To get an idea of what either option is really like, you should talk to current and former franchisees and ask questions about their respective experiences.

Both single and multi-unit franchising offer unique opportunities, challenges and rewards to those willing to expend the necessary time and effort to be successful; deciding which option is best for you ultimately comes down to assessing your personal goals and capabilities, finding the right franchise, and making an informed decision.