Multi-unit franchising allows you to purchase multiple franchises, including units from the same brand or various different brands. According to Joseph Haymore, Florida multi-unit franchising enables investors and businesses to diversify their operations over numerous locations, brands, and industries, reduce risks, and generate higher returns on investments (ROIs).
Multi-unit franchising has been widespread for years. research shows that owners/franchisees of multi-unit franchises in different brands and locations are commonplace today, allowing them to streamline their business operations and stay competitive in different markets.
Research highlights over 45,000 multi-unit franchise owners in the United States, operating more than 228,000 units. Today’s article will discuss a few facts about multi-unit franchising in 2022. Read on!
Rapid Increase in Entry-Level Multi-Unit Operators
Although giant corporations, private equity groups, and franchisors have played a vital role in establishing multi-unit franchising, joseph says entry-level unit operators have dominated the ecosystem. According to FranData, about 42.3% of entry-level franchisees own two to five units.
These owners generate two times more money than franchisees who own more than 50 units on the aggregate. There has been a 23% increase in multi-unit operators, particularly entry-level operators, between 2010 and 2018 and will increase in the next decade as well.
Offers Better Revenue Generation Opportunities
Another fact about multi-unit franchising is that it allows entrepreneurs and franchisors to leverage better revenue generation opportunities. According to joseph, when you own multiple businesses, you are more likely to attract more customers, increase sales, maintain your business reputation, recruit better employees and earn higher profits.
Remember, this is because multi-unit franchising allows you to establish scale in your business efficiently and quickly compared to a single-unit operator. Various industries, companies, and businesses have taken advantage of multi-unit franchising. For example, automotive companies have achieved 54% more ownership in multi-unit franchises and the stats are similar in large quick service restaurant brands as well.
Ensures Flexibility and Stability
Joseph says you can recruit the most skilled and experienced talent to oversee your administrative, financial, operations, and project-related tasks due to being a multi-unit operator. This allows the owners to focus on strategic opportunities such as growth.
Semi-absentee ownership is one of the primary reasons people focus on multi-unit franchising. Not only does multi-unit franchising diversify your business portfolio, but it also prevents you from spending more time on business operations details and focusing on strategic thinking related to growth.
When you own multiple brands/franchises, you can leverage the power of shared resources and save time and money. For example, all franchises can work with the same supplier on nonproprietary items, and when you experience a shortage in one franchise, you can bridge the gap by supplying the goods from another. This example can apply to all vendors that are suppliers of goods and services.
Diversifies Ownership Portfolio and Lowers Business Risks
In addition, a multi-unit franchisee has increased stability due to lower risks, allowing you to expand your business and scale your operations to new markets.
Since you will have a diversified ownership portfolio, improved brand reputation, and streamlined revenues, this gives you business stability, flexibility, efficiency, reliability, and cost-effectiveness with vendors, lenders, and landlords.
Purchasing or running a multi-unit franchise is an excellent way to mitigate business and financial risks. A growing body of research evidence shows that multi-unit franchises have higher success rates than single-unit and small businesses.
Unlike independent companies owned by entrepreneurs with a failure rate of 50% or higher, franchises have a much lower failure rate. According to joseph, this is a massive difference, giving peace of mind to franchise owners due to lower risks.
In addition, you can take advantage of economies of scale, such as purchasing inventory, implementing marketing, and advertising strategies, recruiting employees, and providing training to all team members.
All these things go in your favor when you are a multi-unit franchise owner. However, Joe Haymore, Florida recommends performing thorough research, collecting data, analyzing it, and generating valuable insights to make informed decisions on which brands you franchise with.
Final Words
Although multi-unit franchising requires higher investment, it is worth your time and money because these units provide more stability and higher success rates. joseph suggests that a multi-unit franchisee still operates independently but with the benefits of scale rather than a single location franchisee that might not have the benefit of scale. Joseph currently operates in multiple brands, and industries, allowing his company to drive more customers, increase sales, reduce costs and generate higher ROIs ultimately Joseph is involved in various different brands as multi-unit franchisees across various different industries.
