single unit or multi-unit franchising

Single Unit or Multi-Unit Franchising? Which is right for you?

Is single-unit or multi-unit franchising right for you? Contrary to what you may have heard, there is no wrong answer. Both roads have their advantages, and both have their challenges. Like most things with franchise business ownership, the right answer depends on you.

Before we dig in, let’s review the differences between the two.

Single-unit franchise ownership is the most common type of franchise ownership. In this relationship, the franchisor grants the franchisee the rights to operate one location using the franchisor’s branding and operating system. In most but not all instances, the franchise unit is owned and operated by the franchise owner.

Multi-unit franchise ownership happens when the franchise owner awards the franchisee rights to open multiple units, either all at once or over time. Unlike a single-unit ownership, the franchise owner will likely hire a management team to run the day-to-day operations of the franchises once multiple units are open. That allows the franchise owner to focus on CEO-type work or maintain traditional employment while running their business in a semi-absentee fashion.

So is single unit or multi-unit franchising right for you? That depends on your life goals and dreams along with your set of skills that you’ll apply to franchise ownership.

You’re right for single-unit franchise ownership if:

You want to be a hands-on owner. Many franchise owners like the idea of being heavily involved with their business. The business is their baby, so they are excited about making all of the decisions and spending all of their time growing it from the day it opens. They are excited to engage their community on a daily basis. They love customer service and find their identity inside the business. They want to be more than a name on a licensing agreement, they want to be the person their customers associate with the business.

You like to take things slowly. Most single-unit franchise owners are new to franchising, so they are plenty happy to take things slowly and learn as they go. Rather than deal with the pressure of knowing they have to open more units within a certain time period, they are more comfortable growing the business they have and learning the ropes as small-business owners. In most instances, they can decide to expand within their current franchise system later on if that suits them. Or, they can look to open a second location with a different franchise system. Either way, they understand there is a time for that decision after they’ve become comfortable operating their first franchise location.

You want to keep it simple. Presumably, opening a single unit will require a lower investment than opening multiple units. Risks are lower should the business face unexpected challenges. Your business is less vulnerable to issues with employee turnover. Exiting the franchise when the time comes is easier. Some franchisors only award single units for these reasons and more. They want people to successfully live their dream as small-business owners without overwhelming them.

You’re right for multi-unit franchise ownership if:

You want to build a franchising empire.  You aren’t just planning for tomorrow, you can see a whole plan of growth for the next five, 10 or 20 years. You are excited to develop something big in your community and beyond. You like the idea of holding greater influence in a franchise system, perhaps even helping guide it into the future.

You want to work on your business, but not in your business. Your skill set lies in your ability to develop and grow management teams. You want your time spent on idea generation, financial matters and growth strategies rather than dealing with the daily tasks of running a business. You want to keep your current job and treat your business as a semi-absentee venture.

It can be financially advantageous. Multi-unit franchise ownership has the potential to generate greater revenue vs. single-unit ownership. Costs are lower due to economies of scale. Market domination is more attainable because of the ability to cover more area with more locations. Besides, if you’re operating the system well enough to earn a profit in one unit, increasing the number of units should increase the profit as well.

Whether it’s single unit or multi-unit franchising, there’s an excellent chance that there is a franchise system and structure right for you. Give me a call at 919.846.7111 or click the button below to schedule a 15 min consultation and find out more.

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