Bill McPherson

bill McPherson is the vice president of franchise development for AlphaGraphics, a leading franchisor of printing and marketing solutions. With more than 285 locations in 6 countries, AlphaGraphics is one of the largest U.S.-based networks of locally-owned and operated Business Centers offering a complete range of print, visual communications, and marketing products. For more information, visit www.alphagraphics.com.

Multi-unit franchising has quickly become a popular option among established and new franchisees. Not too long ago, franchise owners opted to operate single-unit locations based on the idea of buying themselves a job.

Over the past several years, ambitious entrepreneurs have decided that expansion is one of their main goals when purchasing franchises.

According to FranData, there are nearly 45,000 multi-unit operators in the United States. They make up approximately 54.8% of the overall franchise market, equaling about 228,000 total units. Of those that own multi-unit operations:

• 42.3% own two to five units

• 14.3% have six to 10 units

• 15.3% own 11 to 25 units

• 8.6% have 26 to 50

• 19.6% run 50-plus units

While the monetary profit may seem enticing for franchisees wanting to expand their footprint, there are things to consider before diving headfirst into the multi-unit space. First, there is a higher investment initially for opening multiple franchise locations. If you already operate a franchise and look to expand, you will need the funds to finance the additional locations.

The second thing to consider is your overall strategy for opening multiple locations. Arguably the best time to open additional locations is when you are both mentally and financially ready for the added pressure of operating two or more locations. In addition to finance, one needs to consider strategic location, inventory and equipment, a timeline, and the overall determination to succeed.

Below are some additional things to keep in mind when deciding on opening multiple franchise locations:

If you are just getting into the franchise business and aspire to open multiple units from the beginning, it is important to have a conversation with the franchisor. One of the primary reasons entrepreneurs purchase a franchise is for their support systems and training programs. Explain your overall goals and desire to operate multiple units to the franchisor. Find out how their support system helps multiunit owners. When it comes to serving multi-unit owners, a franchise needs more sophisticated systems in their network. That includes high-quality software, operational systems, owner training and tools.

Understanding the franchisor’s expectations of you as a muti-unit operator is also important. Do they expect you to have a presence at each location? How many people are needed for you to begin your expansion? These are just a couple of questions that you should consider asking the franchisor. In many cases, a great franchise brand will guide you through these questions during the discovery phase while also considering your knowledge and skillset. A great franchise will help steer you down the right path on your quest for success.

While remaining hands-on during the day-to-day operation may be feasible when operating one or two locations, it’s impossible to be at every location every day once you begin expanding your franchise empire. Delegation is the key to earning success and growing your franchise territory. You have to ensure that you have the right management team in place at each location to keep the operation running smoothly. You will need individuals to help with anything from store management to finances. Being able to delegate to employees that you trust will allow you to focus on promoting and growing your business. While hiring the right individuals is a necessity, it is vital for you to keep your team intact. High turnover not only brings down the overall morale of the company, but it also increases expenses for training and onboarding. Those are funds you will need if the overall goal is to continue expansion. Utilize your franchise’s support systems to help retain employees. Oftentimes, they offer a variety of training and personal development for employees. Giving the employee a path to greater opportunity within the franchise will provide motivation and give them a reason to continue working hard. Giving employees incentives as well as treating them properly will keep them on board for long periods of time and help you focus on running and growing the business. “If you are just getting into the franchise business and aspire to open multiple units from the beginning, it is important to have a conversation with the franchisor.”

Time management skills are a necessity when running multiple units. While owners may not have the capacity to be at every location all the time, it is paramount that you are still hands-on when it comes to the overall management of the business. You need to maintain a regular presence at each location for your business to truly grow and be successful. This shows employees that you are not an owner who is looking for a profit, but you also care about the business as a whole.

To build loyalty with the staff at each location, the owner doesn’t have the luxury of just showing up. He or she must contribute to the overall workflow of the business. This can also encourage employees to work together as a team. It’s about leading by example, and that is extremely vital when it comes to owning multi-unit franchises.

Pursuing multiple franchise locations has a tremendous upside and benefits. From potential increases in revenue to expanding your territorial footprint, this option can lead to a great long-term career and leave a business for your family and children. But before taking that leap of faith, make sure it’s the proper path for you and your talents. It takes work to make multi-unit operations successful. From hiring the right management team to juggling your time, the multi-unit model has its pros and cons. Don’t jump at the approach because of the money. Do it because it is the best choice for your long-term goals. If you decide that it is, take the opportunity to speak to potential franchises and begin your journey.