After successfully opening a franchise and turning it into a profitable, well-run business, you could be setting your sights on more units. Or perhaps you want to jump straight into multi-units because you want to increase profits as quickly as possible.
Here are 3 things you need to know before you jump into multi-unit ownership.
1. It’s not just like opening one unit
After opening a successful business you could be thinking you just need to repeat the process for each unit and you’re on your way. It’s not that easy. When you opened your single business you could oversee everything. In fact, you were probably pretty hands-on in the process. When you move to multiple units you’re going to have delegate, and not just the small stuff, you’re going to need to step away from some of the big stuff. If you have more than two locations it’s going to be impossible for you to get involved in the details of each franchise. The key will be finding great people to run things when you’re busy building the bigger operation.
2. You could be up for a discount
If you know multi-unit ownership is your endgame, look for franchisors that offer help. For instance, if a franchisor charges a $1,000 set-up fee for some of your equipment, they won’t necessarily make you pay $3,000 for three locations. That means planning on opening multiple locations could be cheaper than you think. You can also talk to your franchisor about discounts on royalties and other fees. Take all this into consideration when you’re choosing a franchise concept to buy. If you already own one franchise, talk to franchisor about what accommodations they’ll make if you guy extra units.
3. Building too quickly could doom you
One of the main reasons to go multi-unit immediately is economies of scale. You want to do all the work, and make all the purchases up front. But sometimes that can come back to bite you. Having four subpar units may actually be worse than have one or two outstanding ones. It may take a little more patience, but if you set everything up correctly, and bring in the right people from the beginning, it can save you from having to go back and fix it later. You also want to stay lean as long as you can. If you expand too quickly you could end up adding unnecessary layers between you and what’s happening on the ground. You should be an expert in your franchises so at the end of the day, you can always step in and make things right.
For many franchise owners, buying another unit is the next step in their growth. Find a support group in your area for multi-unit franchise owners so you can ask questions and get advice from people who have been there before. Here at BookKeeping Express we’re experts in multi-unit franchises. Get a free consultation today and we can tell you exactly how to expand without breaking the bank.