Published August 5, 2014

Four Ways to Attract More Multi-Unit Franchisees

Every franchisor wants to attract a “certain type” of franchisee, and lately, the type of franchisee every franchisor seems to want is a multi-unit franchisee.

OK, maybe not every brand wants to sell more units to fewer franchisees, but it’s something I’m hearing about more and more—franchisors looking to attract deep-pocketed investors rather than hands-on moms and pops. And it makes sense. In theory, multi-unit franchisees are easier to manage, bring in more money, and in some cases, are more satisfied with the brand overall. What’s always been common practice in food franchising—requiring franchisees to commit to opening multiple units as part of their franchise agreement—is now becoming common outside of food. But attracting multi-unit franchisees and keeping them happy isn’t as easy as just changing your franchise agreement.

Post everything you can online. Multi-unit franchisees tend to be business-savvy entrepreneurs looking for the next best business opportunity. As one successful area developer told us, he’s constantly researching different franchise opportunities, and the bulk of his research is online. As a franchisor, you need to put everything you can online—financial info, franchisee satisfaction data, testimonials from current operators. We give you this same advice for attracting single-unit franchisees, but for multi-units, it’s even more important.

Make sure your franchise system is set up for multi-unit ownership. Most franchise systems WANT to sell multiple units to fewer franchisees but that doesn’t mean you SHOULD. Do you have the resources and systems in place to actually support multiple-unit operators? You need to make sure the brand’s business plan, marketing, systems, corporate management, and culture are all set up in a way that supports franchisees who will be managing more than one store.

Connect current multi-unit franchisees with prospective ones. The only way for prospective franchisees to know whether the franchise system really does work for multi-unit operators is to ask multi-unit operators, so it’s your job to make these conversations happen. Highlight for candidates which franchisees own multiple units and encourage them to contact these franchisees as part of the validation process.

CEOs, meet with candidates. I attended a great panel discussion on multiple-unit ownership at this fall’s Franchise Leadership and Development Conference. Unavailable CEOs were a deal-breaker for the franchisees who spoke on this panel. As one franchise put it, “If I’m going to drop millions on a franchise brand, the CEO better be willing to meet with me early in the process. If he’s not, then I’m not investing.” CEOs, if you really want serious area developers to be a part of your brand, you’d better be willing to talk to them.

Which brands keep their multi-unit operators the most satisfied? Check out our recent report.


About the Author: Molly Rowe

Molly Rowe is the former Editorial Director at Franchise Business Review and reported regularly on top franchise opportunities and the latest trends in franchising. Molly oversaw Franchise Business Review's research and the publishing of FBR's annual Top Franchises Guide, Top Low Cost Franchises Guide, and many other specialty franchise reports.
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