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Multi-Unit Franchising: Is it a Good Choice?

Sep 2, 2008
If you are making the choice to become a franchisee, chances are you have done some of your homework. You most likely know that franchises have a great opportunity for success, usually much higher of a chance than if you were to start your own independent business. In addition to that you will be able to be your own boss. You will also be investing your time and money into something that could be very profitable. You may already know that you want to become a franchisee, and maybe somewhere you have heard of multi-unit franchising. So, at this point you may be wondering if multi-unit franchising is a possibility and if it is a good choice.

First of all, you must understand what multi-unit franchising is. Multi-unit franchising is when a franchisee purchases more than one franchise from a franchisor. So the franchisee may have units in multiple places around town or even in different countries.

Now, whether this is a possibility or not depends on the franchisor. Some franchises are set up to allow multi-unit franchising. However some either are not set up in that manner or do not like the idea of allowing the concept. So, you will need to check with your potential franchisor and ask them specifically if they allow this. Also, you will want to make sure that it is included in your written contract with that franchisor if you choose that franchisor.

There are numerous benefits to starting or buying more than one franchise. Right the beginning your franchisor may reduce your opening fees if you agree to opening a certain number of franchises. They may also provide you with an exclusive territory for a certain time period. This is a great advantage as you will be able to get established and start making profits quick. They may even reduce your royalty fees if you the franchisee agrees to support your own units. They may even allow you to purchase another site for your territory with no fee or a minimum fee. All of these types of benefits will not be offered with every franchise. So you will need to check with the franchisor to see what types of benefits they will provide to a franchisee who wishes to open multiple units.

You will also receive ongoing operating benefits. You will be able to share your staff among the different locations you own. You will have advertising gains since you will pay a certain amount but also be covering all your locations. You will also have an advantage at establishing a strong management team with a wide variety of qualified employees from all of your locations. Also you will be able to save money by buying goods in a larger quantity and sharing through your locations.

While you will receive many benefits from multi-unit franchising there are still other things to consider. You may want to only open one at a time, since each one will require much time and effort on your part. Therefore you will be better prepared for the locations that you open later. Also, be careful in your decision as you will be putting all your money in one pot. Deciding to open multiple franchises can be very risky, however you can also make more profits and enjoy the benefits your franchisor provides to franchisees with more than one unit!
About the Author
For more information on an automotive franchise, visit BumperDoc auto body franchise and start your path to business ownership.
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