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Weekly UpdatesAccording to Darrell Johnson of FRANdata, since 2005, 20 percent of franchisees have more than one unit. But those with multiple units account for more than 50 percent of the franchise locations that exist.
First of all, this shows us once again that franchises work. They work so well that entrepreneurs can buy a single unit and have time to manage their management staff, not only the actual business at hand. This allows them to open another location benefiting from the support, training, marketing, discounts and operation system of the franchisor.
Second, this also shows how profitable franchises can be. Many single-unit franchise owners eventually become multi-unit owners due to the profits of their first location.
Multi-unit franchises tend to work well for both the franchisor and franchisee. Franchisees are able to build their business using a system and suppliers they are familiar with, and the franchisor has the benefit of a knowledgeable person with a proven track record opening another location.
This trend has been working so well that some franchisors, such as Dunkin Brands, only award multiple-unit development and no longer offer single units.
For entrepreneurs who think bigger than their bank accounts, buying a single franchise might be the best option to meet your goals. The more successfully you run your business, the faster you can build capital to open your next location. Many franchisors offer discounted franchisee fees to multiple-unit operators. For example, tumble & tea cafe's initial franchisee fee is greatly discounted, but we still offer the same support, training and services to help franchisees open their next location.
The skill set for running multiple units is different than the skill set for a single-unit franchise. When you open multiple units, your main focus will not be the day-to-day operations but managing a group of well-trained employees. Learning how to manage people instead of your single unit can be challenging but, if done correctly, very rewarding.
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