Posted on Sep 01, 2011
The Multi-Unit Movement Benefits Franchisors and Franchisees
Right now, more than one out of ten franchisees operate more than one unit. Many of them operate more than one concept. There is growing evidence of a trend toward multi-unit and multi-brand ownership. The advantages to both franchisors and franchisees are clearly compelling, and dramatic growth in multi-unit and multi-concept franchising is expected over the coming years.
The primary benefit for franchise companies is the opportunity for fast, efficient growth. Area developers who can develop an entire geographical area are ideal because they have strong organizations of their own, which the franchisor can leverage. It takes a much smaller investment in time and money to develop a region or even an entire state when you're dealing with one individual instead of 50. Franchisors who don't have to spend time on the nitty gritty business of opening stores can focus on extending brand awareness - which again, can grow much more rapidly.
The benefits are there for franchisees, too. It's becoming increasingly difficult to make lucrative sums from a single unit. Owners with multiple units and/or brands have the added advantage of being able to spread the risk. Times may be slow for one, but rarely for all - at least not at the same time. Multi-unit operators also report that attaining success gets easier as the number of units grows. Costs per store unit drops, which means more money is available for better managers and better marketing.
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