Multi-Unit franchisees purchase the rights to develop and own multiple locations with the idea of reinvesting profits to scale the original investment into a much larger business.
What is a Multi-Unit Franchise?
In a multi-unit operation, a franchisee will typically work less in the daily operations of a single unit, and instead focusing on strategy and business management at a higher level and hire an experienced director of operations, general managers, and staff to oversee daily, store-level operations and focus more on strategy and the business side.
What are the benefits of becoming a Multi-Unit Franchisee?
Multi-Unit franchisees are drawn to the potential for significant financial gains produced by owning multiple units, and the ability to achieve greater operating efficiencies.
Some of the major benefits of becoming a multi-franchisee include:
- The ability to scale your business by leveraging existing overhead
- Spreading the risk of reward over multiple units
According to the International Franchise Association Education Foundation, while just under 20% of all franchisees are multi-unit owners, they account for more than half (52.6%) of all units, and they average between 4.3 units (in single-brand systems) and 5.83 units (in multi-brand systems).
This means that more than half of all output produced by franchise businesses is generated by multi-unit franchisees. According to the International Franchise Association’s Report “The Economic Impact of Franchised Businesses: Volume III, Results for 2007”:
Franchised businesses were the cause of $2.1 trillion of annual output or 9.0 percent of all private nonfarm output in the United States in 2007.
What do we look for in a Multi-Unit Franchisee?
- Multi-unit franchises are awarded to well-capitalized, experienced individuals and investment groups who are committed to growth and long-term success.
- Multi-Unit franchisees must possess a strong background in business and leadership
- Capital and drive to develop a minimum of 5 units