Franchise Business
REVIEW
Ratings & Reviews of Today’s Top Franchises
SPRING 2014
TOP 50 MULTI-UNIT FRANCHISES
Rated By Franchisees
Greg “Gumby” Morrison opened his first Toppers in December 2005 and now owns three locations in the Milwaukee area.
Sotheby’s International Earns Top Spot
A Look Inside the Top Multi-Unit Franchises
Our Town America Welcomes Newcomers to Charlotte
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TOP 50 MULTI-UNIT FRANCHISE FRANCHISE BUSINESS REVIEW
15 CONSECUTIVE QUARTERS OF SAME STORE SALES INCREASES* PRIME SINGLE AND MULTI UNIT TERRITORIES AVAILABLE 550 LOCATIONS AND GROWING ESTABLISHED BRAND FOR OVER 40 YEARS HOT CONCEPT TO OWN - ENTREPRENEUR MAGAZINE MILITARY FRIENDLY FRANCHISOR
Exclusive territories are available. Call (248) 414-3300 or log onto franchising.hungryhowies.com. Take a self-guided tour of our digital brochure and complete a simple form to request more info.
*Results measure company-wide same store sales figures for each fiscal quarter over the previous year’s fiscal quarter. The measuring period is March 22, 2010 through December 29, 2013. Excludes store sales from the State of Florida. Not all individual stores experienced the same results. New franchisees may have results that differ. This advertisement is not an offer of a franchise. Franchises are offered and sold only through a Franchise Disclosure Document.STATE OF CALIFORNIA: THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE COMMISSIONER OF CORPORATIONS NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE, AND NOT MISLEADING. STATE OF NEW YORK: THIS ADVERTISEMENT IS NOT AN OFFERING. AN OFFERING CAN ONLY BE MADE BY A FRANCHISE DISCLOSURE DOCUMENT FILED WITH THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK. SUCH FILING DOES NOT CONSTITUTE APPROVAL BY THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK. MINNESOTA STATE REGISTRATION NUMBER F–2873. Hungry Howie’s Pizza & Subs Inc., 30300 Stephenson Highway, Suite 200, Madison Heights, MI 48071, 248-414-3300.
SPECIAL REPORT: Top Multi-Unit Franchises
Bigger and Better Successful multi-unit franchise owners are a special breed of franchisees. Not only do they possess the ability to follow a system, build a business, and promote a brand, but they have the strategic vision, leadership skills, grit, and capital to build an empire. This is the second year we’ve taken an in-depth look at this group of franchisees to learn the secrets to their success and, of course, to name our top brands for multi-unit ownership. As with last year, many of the franchise companies featured in this report are the same brands that win our annual franchisee satisfaction awards. This isn’t particularly surprising, as it stands to reason that a franchisor recognized for overall franchisee satisfaction would also have happy multi-unit operators. Regardless of the type of investment you’re considering, one of the best ways to know if a franchise opportunity is really as good as it appears is to look at franchisee satisfaction. Not all brands willingly open their doors to an independent research firm like Franchise Business Review to have their franchisees surveyed, but those who do can offer investors a wealth of information on the system’s leadership, culture, training and support, financial outlook, and franchisee community—all from the perspective of franchisees. With brands that decline to have their franchisees surveyed by an independent third party, this can be a sign of deeper problems.
Multi-unit franchise owners have the strategic vision, leadership skills, grit, and capital to build an empire.
No business comes with a guarantee of success, but starting your due diligence with our top choices for multi-unit ownership will undoubtedly get your research off on the right foot.
Happy franchising!
Molly Rowe, Editorial Director
Franchise Business Review is the leading market research company in the franchise industry, assisting prospective franchise buyers through the examination process of today’s leading franchise systems. Before you invest in any franchise opportunity, get the facts from Franchise Business Review. Our independent franchisee satisfaction reports measure the health of any franchise system, based exclusively on the feedback of today’s franchise owners ... the real franchise experts!
Eric Stites, CEO Michelle Rowan, President Molly Rowe, Editorial Director C.J. Fleck, Senior Web Developer Michael Kupfer, Online Marketing Manager Nicole Kenney, Client Services Manager Jamie Lavigne, Client Consultant Linda Lorrey, Client Consultant Jay Metzenroth, Marketing Coordinator Stacey Picott, Office Manager The Secret Agency, Design & Production
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SPECIAL REPORT: Top Multi-Unit Franchises
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SPECIAL REPORT: Top Multi-Unit Franchises
Photo courtesy of Checkers & Rally’s.
Multi-Unit Franchising A Look at the Top Brands and the ‘Empire-Builders’ Behind Them WHO WE ARE
Franchise Business Review is a national market research firm focused on franchisee satisfaction and performance. Our products include franchise satisfaction reports, custom research and analysis, industry sector studies, executive networking groups, and other services aimed were researched. Any franchise company can take part in our franchisee satisfaction studies at driving franchise performance. at no cost to the company—our research is WHAT WE DO completely independent, and our surveys and To compile the data for this report, Franchise interviews are conducted directly with franBusiness Review surveyed close to 6,600 multi- chisees and senior management. unit franchisees (we focused our research All active franchisees within a system were specifically on operators with at least three given the opportunity to answer 33 benchunits). We invited all North America-based mark questions ranking their franchise in the franchise companies to participate in this areas of financial opportunity, training and study, and over 300 leading multi-unit brands support, leadership, operations and product
Franchise Business Review surveyed close to 6,600 multi-unit franchisees at more than 300 leading brands. development, core values (e.g., honesty and integrity of franchisor), general satisfaction, and the franchisee community. An additional 16 questions asked franchisees about their market area, demographics, business lifestyle, overall enjoyment running their franchise, and role in the franchisee community. From this data, we identify our list of Top Multi-Unit Franchises, which only includes companies with the highest franchisee satisfaction among all the brands we researched.
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SPECIAL REPORT: Top Multi-Unit Franchises
33%
of ALL franchisees are multi-unit operators WHAT IS MULTI-UNIT OWNERSHIP?
The definition of “multi-unit” can vary greatly depending on the franchise concept. In the food and retail industry, it usually means you own multiple physical locations. For service-related sectors, it can mean you serve multiple territories but maintain one central office. Some brands define bigger territories while others break their territories up to be very small (usually based on population). This can mean that someone who meets the definition of “multi-unit franchisee” actually has a smaller business numbers-wise than a single unit franchisee who owns a big territory. Then, of course, there are other multi-unit franchisees who own so many units (sometimes from multiple brands) they are actually bigger than many franchisors. Area development can be another form of multi-unit ownership and also has multiple definitions. Typically, an area developer is someone who’s agreed to develop a number of units within a territory by selling franchises within that territory to additional investors, training and supporting those franchisees, and getting paid a percentage of the royalty from those units. Many area developers own franchise units themselves, but in some systems, they simply perform a support role for franchisees in their area. Others are simply charged with selling franchises, and support is handled through the corporate office. Clearly, the exact definition and role of an area developer can vary from franchise to franchise, and you will need to research the specifics of the opportunity you are considering should you go down the path of area development. For this report, we looked only at franchisees with three or more franchise units within the same brand. Franchisees told us owning two units was very similar to owning just one—it wasn’t until they reached three or more units that their operations and support needs really changed.
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SPECIAL REPORT: Top Multi-Unit Franchises
F E AT U R E D
Franchisee Jane McElhaney Our Town America Charlotte, NC Franchisee since 2007 Did you always plan to own multiple units? I originally invested in one territory in the Charlotte area. There was another Our Town America franchisee in the Charlotte market who owned another territory. We worked well together sharing ideas and successes, so when he decided to sell his territory in 2011, he came to me. It was an easy decision. Photo courtesy of Mathnasium.
Potential franchisees who want to own multiple units need to look closely at the franchise system and whether it’s set up to support multi-unit ownership.
It’s important to note that not every multiunit concept (or franchisee) starts that way. Many evolve into it with time and success. For example, Hungry Howie’s Pizza and Subs franchisee Bob Leger opened his first location in 1987. He opened a second in 1990, and, by 2000, he had 25 locations. Whether or not you plan to start out as a multi-unit owner, it’s important that you go into your research with that possibility in your head. “You need to be sure that your franchisor has the systems in place to help you to succeed,” Leger said. At Weed Man, a lawn care franchise and the #2 company on our list, the corporate office does a lot to prepare its franchisees for growth. They offer a formal multi-unit training program for interested franchisees. When
they are ready to expand, franchisees get help putting together a detailed business plan and identifying a general manager to run one of their locations. “The training provides our franchisees with a comprehensive blue print, so that they can avoid the many common missteps in expansion,” said Roman Skrypuch, Weed Man’s director of franchise development. If you decide to commit to opening multiple units right out of the gate, be sure you know what you’re getting into so you can honor that commitment. As Hungry Howie’s CEO Steve Jackson told us, not fulfilling a multi-unit agreement can create an adversarial relationship with both the franchisor and franchisees because it holds up a territory/area that could be developed by someone else.
Why did you choose your franchise? My brother owns an Our Town franchise in Tampa. He bought his franchise two years before I did and thought Our Town would be a great fit for us since we both have many years of experience in business-to-business sales. In 2008, the last two of our five kids were entering college, and I was ready to enter the workforce again. The Our Town America franchise is community-oriented, which was important to me since I had done volunteer work in the Charlotte area. Our Town’s mission is to assist new families when they move into their new neighborhood by directing them to businesses they are searching for, which in turn helps businesses in the community grow by driving these new customers in their doors. The community spirit of what we do is what drives me every day to share with local businesses the importance of welcoming newcomers to grow their customer base. What advice do you have for someone considering a multi-unit opportunity? Owning a multi-unit franchise is an investment in a business you must believe in. You have to invest in yourself and know that the business is a good fit for you and your family. With the right opportunity, it makes more sense to invest in multi-units of a single franchise, rather than to invest in several different franchises. This way, your focus is on one business model. For more information on Our Town America opportunities, call (727) 345-0811 x232 or visit www.ourtownamerica.com.
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SPECIAL REPORT: Top Multi-Unit Franchises
Photo courtesy of Sport Clips.
WHAT TO LOOK FOR IN A MULTI-UNIT OPPORTUNITY
Jackson of Hungry Howie’s compares multiunit franchise ownership to having children: The first one or two you can handle, but more than that, you’re outnumbered, and it requires a different skillset and a different type of franchisee. It also requires a different type of franchisor. Potential franchisees who want to own multiple units need to look closely at the franchise system and whether it’s set up to support multi-unit ownership. Does the franchise have the resources and systems in place for multiunit operators? Are the brand’s business plan, marketing, systems, corporate management, and culture set up in a way to manage stores from afar (or at least not from the premises on a daily basis)? Is the brand scalable? “The service—the hand-holding—that the franchisor provides is crucial for when you hit growing pains. And that almost definitely will occur at some point,” said Alex Bingham, senior vice president of operations
Technology is hugely important for success with multi-unit ownership (and often an area that scores lower in terms of franchisee satisfaction). at The Little Gym. “Even more paramount is the set of systems that the franchisor has in place to make the operation of the business turn-key. Systems such as point-of-sale, product implementation, training, etc., are the ones that make the operation most scalable. These are the things that will minimize those growing pains in the first place.” Technology is hugely important for success with multi-unit ownership (and often an area that scores lower in terms of franchisee satisfaction). The franchisors’ websites, training platforms, and financial tracking software must be able to work across multiple systems
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with the ability to look at unit performance both individually and collectively. “A good technology system can sliceand-dice down, as well as roll up to look at how well things work—scheduling, invoicing, payroll. The website should do the same thing—allow you to segment out one unit or territory or look at all your units as one,” said Leann Reynolds, president of Homewatch Caregivers. Most of the franchise brands we talked to don’t necessarily provide more support for multi-unit operators, but they do provide different support specific to multi-units. Brands
SPECIAL REPORT: Top Multi-Unit Franchises
like Checkers & Rally’s and Two Men and corporate office to make these decisions, said a Truck host an annual conference just for CEO Cody Howard. multi-unit owners, and other brands tailor From a lending perspective, franchisors their training for multi-unit needs. told us it is much easier for multi-unit franchisees to get financing. Banks are more receptive PROS AND CONS OF BEING to multi-unit loans, particularly if the A MULTI-UNIT OWNER prospective franchisee has previous experience Being part of a franchise system as any type in the specific industry they’re looking to do of owner offers significant benefits over start- business in. Multi-unit ownership can also ing a business on your own. You’re part of an make a business more attractive if a franchisee established system and franchisee community wants to sell it down the road. that guides you along the way, and you benefit “If you have a long-term horizon to from the system’s resources and tools for many be attractive to a buyer, then you can do business “basics” like marketing and website exceptionally well with multiple units,” said support. But, being a multi-unit operator Crunch Franchise president Ben Midgley. comes with its own unique advantages over Other pros of owning multiple units are single-unit ownership. increased brand awareness (the more units Multi-unit ownership affords franchisees you own in an area, the more you’re able to the opportunity to lower their costs per unit promote your brand) and increased power because their fixed costs are shared over more within the franchise system (the more units locations. Achieving economies of scale makes you have, the more sway you have with the the business more profitable over time—and corporate office). You also have the ability to more efficient. Especially in low-margin indus- provide more opportunities for employees and tries like food, vendor relationships improve recruit better people. and expenses go down the more you buy. “When you are smaller, you are not always “Your cash flow, your relationship with your able to hire a dynamic applicant because you banker, the ability to negotiate new sites … have nowhere to put him or her, or you may there’s a list of opportunities that grows as you not even have the chance to interview a quality expand,” Hungry Howie’s Jackson said. “Your applicant because they are looking for a success helps create more success, and a more company they can grow with,” said Hungry successful unit can help carry a weaker unit.” Howie’s franchisee Leger. “If your equipment goes down, you have Many of the cons of multiple-unit ownermultiple units to cover operations,” added Jim ship are most prevalent in the first few years Bonner, a Heaven’s Best Carpet Cleaning of business. While ultimately more profitable, franchisee. “You’re not going to have to shut it can take longer to actually be profitable down operations and productivity.” because the investment is higher. And, a In industries like senior care, which can bigger initial investment means more risk require a significant amount of licensing, early on (although that risk is spread out multi-unit ownership makes sense because among multiple locations). franchisees are already set up for growth once Franchisees told us that multi-unit the first unit is up and running in a state. ownership doesn’t necessarily require more “The economies of scale, from an opera- work than a single unit, but the work is diftions standpoint, allow for efficiencies and ferent, which might not appeal to everyone. diversification across multiple communities— Single-unit franchise owners are usually very or markets, which leads to stability and greater hands-on in the day-to-day operations of growth opportunities,” said Shelly Sun, CEO their business. As they grow into multi-unit of BrightStar Healthcare. ownership, their ultimate success is highly Multi-unit ownership can also mean you dependent on making the transition to more have more say in factors that directly affect of a managerial role, with a reliable team in your business. At Heaven’s Best, for example, place to handle the day-to-day operations of a multi-unit operator typically owns an entire the business. region, so, rather than debating things like Continued on page 10. prices and marketing spend with two or three other franchisees, they work directly with the
What a Typical Multi-Unit Franchisee Looks Like
% 71 are male
% 84 are Caucasian
% 67 are 45 or older
Median age is 45 – 54
% 20 own 5 or more units/territories
80% are college graduates Average income of multi-unit franchisee:
$104,704 compared with
$79,684 for all franchisees
43%
work 50+ hours per week
12% work less than 30 hours per week
73
%
would “do it again” in terms of investing in their franchise
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SPECIAL REPORT: Top Multi-Unit Franchises
THE LIST
Best of the Best: Top 50 Multi-Unit Franchises
Sotheby’s International Realty Real estate
*W eed Man Lawn care
Kona Ice Mobile shaved ice
Palm Beach Tan
* View this company’s full satisfaction report at: www.FranchiseBusinessReview.com
Beauty services
Murphy Business & Financial Business brokers
* Visiting Angels Senior homecare
* Heaven’s Best Carpet Cleaning Carpet cleaning
*W indow Genie
“ The executive team is one of the best in the business … They all are very accessible and easy to communicate with.” – Checkers & Rally’s Franchisee
Window cleaning
Better Homes & Gardens Real Estate Real estate
Pop-A-Lock Locksmith services
Miracle Method Surface Refinishing Bathroom & kitchen remodeling
*H WY 55 Burgers 50’s style family restaurant
Budget Blinds Custom blinds & window coverings
*C ertaPro Painters Painting
*C heckers & Rally’s Quick-service restaurant
Interim HealthCare Senior homecare
WOW 1 DAY PAINTING Painting
*T wo Men and a Truck Moving services
“ The Snap-on family is just that — a family that supports everyone in it.” – Snap-on Franchisee
*S nap-on Tools — more on inside back cover Automotive services
*H ome Instead Senior Care Senior homecare
*B rightStar Senior homecare
*T he Little Gym Early childhood education
*H omewatch CareGivers Senior homecare
Anago Cleaning Systems (master franchisors) Commercial cleaning services
*C runch Fitness Fitness club
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Startup Investment
Cash Requirement
Total Units
$194,750 – $620,500
$50,000 – $100,000
433
$40,000 – $60,000
$50,000
457
$99,800 – $120,000
$20,000 – $25,000
472
$554,725 – $821,375
$250,000
215
$45,750 – $113,600
$30,000
165
$62,935 – $84,685
$34,950 – $42,950
470
$28,900 – $64,000
$15,000
1,248
$89,000 – $139,000
$60,000 – $80,000
168
$194,170 – $540,000
$100,000
250
$100,000 – $120,000
$62,000
328
$85,000 – $125,000
$67,500 – $107,500
137
$191,280 – $342,130
$125,000
109
$89,000 – $187,000
$74,950
806
$129,000 – $158,500
$75,000
411
$111,000 – $825,000
$250,000
447
$115,500 – $188,500
$115,500 – $188,500
325
$90,000 – $140,000
$90,000
25
$173,000 – $578,500
$150,000
224
$143,683 – $307,700
$30,095 – $79,265
3,641
$100,000 – $115,000
$45,000
643
$90,378 – $165,676
$100,000
267
$157,500 – $294,000
$75,000 – $100,000
202
$77,750 – $125,000
$50,000
211
$114,000 – $155,000
$100,000 – $150,000
35
$1,200,000 – $1,500,000
$300,000 – $1,000,000
56
SPECIAL REPORT: Top Multi-Unit Franchises
*S occer Shots Youth sports
*S nip-Its Hair cutting
*O ur Town America Advertising services
Hungry Howie’s Pizza & Subs — more on inside Quick-service pizza
front cover
* F irehouse Subs — more on back cover Fast casual restaurant
American Poolplayers Association Pool league
* T he Goddard School Early childhood education
Auntie Anne’s Quick-service bakery
Coldwell Banker Real estate
Realty Executives International Real estate
*T he Maids Cleaning & maid services
*A ctionCOACH Business coaching
Sport Clips Hair cutting
Mathnasium Math learning center
Toppers Pizza Quick-service pizza
Charley’s Philly Steaks Quick-service restaurant
Kampgrounds of America/KOA Camping services
Liberty Tax Service Tax preparation services
*S helfGenie Shelving solutions
AdvantaClean Cleaning services
*S ynergy HomeCare Senior homecare
Linc Service Network Commercial HVAC services
ERA Real estate
Yogurtland Quick-service frozen yogurt
Sky Zone Indoor trampoline park
Startup Investment
Cash Requirement
Total Units
$17,500 – $21,000
$16,500
147
$118,300 – $151,100
$100,000
67
$74,800 – $105,450
$89,000
41
$227,200 – $401,500
$100,000
544
$169,414 – $989,553
$80,000 – $100,000
747
$16,720 – $19,890
$16,720 – $19,890
293
$701,400 – $721,400
$150,000
405
$194,875 – $367,600
$40,000 – $80,000
1,082
$52,670 – $496,050
$75,000+
2,270
$20,400 – $119,000
$1,000 – $50,000
480
$97,145 – $123,895
$60,000
1,109
$61,250 – $108,441
$35,000
234
$158,300 – $316,500
$100,000
1,180
$99,750 – $139,000
$40,000 – $55,000
406
$286,628 – $529,968
$150,000+
59
$101,572 – $465,282
$75,000 – $100,000
421
$225,950 – $4,462,925
$7,500 – $30,000
485
$56,800 – $69,900
$56,800 – $69,900
4,262
$70,100 – $125,500
$45,000
126
$92,000 – $366,905
$75,000 – $300,000
168
$59,025 – $156,700
$50,000
260
$118,580 – $210,960
$65,000 – $75,000
132
$42,700 – $205,900
$43,700 – $205,900
648
$323,159 – $725,451
$400,000
235
$811,288 – $2,408,640
$600,000
141
“ Snip-Its trainers are always open to coming to my store to provide additional training and help my stylists learn new skills.” – Snip-Its Franchisee
“ I always feel like headquarters cares about our success, and I am pleased that I get personal responses and help whenever needed.” – Mathnasium Franchisee
“ The training and support is really top notch. It is amazing how much we have learned in just one year of being a member.” – Linc Service Network Franchisee
For more information on the companies in this report, visit www.FBR50.com
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SPECIAL REPORT: Top Multi-Unit Franchises
Photos courtesy of Soccer Shots and Liberty Tax Service.
Continued from page 7. “You must learn to delegate tasks, follow up with those tasks, and trust your leadership team,” said Hungry Howie’s franchisee Leger. “It’s so important to develop the right habits, processes, and relationships with that first location before expanding,” adds Sun of BrightStar. MARKET ANALYSIS
Multi-unit franchising has become hugely popular with both franchisors and franchisees in recent years. This year, 20 new franchise companies were eligible to participate in our multi-unit research (because they had at least five franchisees who own 3 or more units). We expect this number will only continue to grow. “If you look at all the conferences that are popping up—the expos, the periodicals that are devoted strictly to multi-unit owners—you are starting to see a key focus in popularity that you haven’t seen in years past,” said Randy Shacka, president of Two Men & a Truck. Prospective and existing franchisees recognize the significant revenue potential in owning three or more units versus just one, and franchisors told us they want to increase their multi-unit operators because it is easier to manage fewer franchisees (and because multi-unit owners tend to be more satisfied). “You can really get to know every person, every person’s significant other, their kids… There’s great networking between the franchisee
base, and it’s easier for people to adhere to your systems. It allows you to create a tighter culture,” Crunch’s Midgley said. First/single stores require more from a start-up perspective, added Jackson from Hungry Howie’s. “We send more support staff to a first opening, and fewer to others because Store 2 opening procedures are more streamlined.” WHAT IT TAKES TO BE SUCCESSFUL MULTI-UNIT OPERATOR
Many of the traits that make a single-unit franchisee successful are the same for multiunit owners: marketing/sales experience, operational expertise, passion, willingness to follow an established system. But as the number of units increases, so too does the focus on leadership and solid management skills. If you’re a hands-on, detail-oriented person who wants to be in your business every day and very involved in every detail, multi-unit ownership might not be the right fit for you. “It’s very difficult for multi-unit operators to be micro managers,” said Hungry Howie’s CEO Jackson. “There has to be a balance. You give people goals and reward them accordingly. I’ve seen people who transition to multi-unit ownership work themselves to death because they do everything themselves.” “The most important trait we find is someone with a vision and a strategic mindset,” said
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Bingham of The Little Gym. “This is critical when developing a multi-unit operation. Without vision, you’re simply doubling the amount of work you have because you have two separately operating businesses. With a vision and strategic mindset in place, your two (or more) businesses operate in tandem, recognizing opportunities for economies of scale.” Being properly capitalized is even more important for multi-unit franchisees because the ramp-up can take longer. Even with a lower-cost investment like Heaven’s Best, it’s important not to expand too quickly, says CEO Howard. Some franchisors, like Hungry Howie’s Pizza & Subs, look for franchisees who own other food concepts because they already have restaurant experience and know what is needed to run a successful franchise. Of course, prior experience does not mean a franchisee gets to ignore their new brand’s system. “Sometimes franchisees with prior experience at a competing concept want to bring all their old ideas with them. This can be beneficial, but it can also sometimes be confusing,” Jackson said. Ultimately, says The Little Gym’s Bingham, multi-unit operators need the perfect balance of influence and restraint to run their business successfully. “They should have enough dominance in
SPECIAL REPORT: Top Multi-Unit Franchises
Photos courtesy of Two Men and a Truck and Kona Ice.
their personality to hold someone accountable, but be able to temper that enough to give up some control of operation to managers, because they can’t be in both stores at the same time.” FRANCHISEE SATISFACTION
Any franchise system can promote itself as a multi-unit opportunity, but there’s no guarantee they have the resources, processes, training, and technology in place to actually support multi-unit franchisees successfully. This is why it is imperative that investors looking at investing in multiple franchise units ask for a franchisee satisfaction report (preferably from a third party) and talk to other multiunit operators within the system. Generally, franchisee satisfaction among multi-unit owners runs slightly higher than satisfaction among single-unit franchisees. This isn’t surprising since profitability tends to play a role in satisfaction, and multi-unit operators tend to be more profitable. In 2014, 50% of the participants in our survey ranked the financial picture of their business as strong/very strong (compared with 41% of single-unit owners). Franchisees of both types rank their system highest in the areas of overall enjoyment they get from running the business and being a part of their franchisee community, respect for their franchisor, and willingness to rec-
ommend their system to other prospective franchisees. Eighty percent of the multi-unit franchisees we surveyed for this report said they would recommend their franchise brand to someone else. One of the lowest rated survey categories for both single- and multi-unit franchisees is Training and Support. This category encompasses several areas—ongoing support provided to the franchisee, ads and promotions, systemwide communication, and effective use of technology. As we mentioned earlier, multiunit operators rank their systems lower in technology than single-unit owners. This is likely because, as franchise locations grow, franchisees rely more and more on effective technology to tie them all together. Twentyfour percent of multi-unit franchisees rank their systems’ technology use as average/poor, compared with 19% for single-unit owners. SUMMARY
The allure of multi-unit ownership has never been greater. Franchisors look to attract multiunit owners because they are easier to manage, and franchisees seek out these opportunities because, with more units, usually come greater rewards (and reduced risk). But finding the right system—one with the support, technology, and leadership team in place to support multi-franchise ownership is no easy task.
The franchise companies featured in this report have a proven track record for growing and supporting successful multi-unit owners—and they have the highest satisfaction in the franchise sector among multi-unit franchisees. For the right franchisee with adequate capital, these 50 brands offer the potential for an incredible investment opportunity—one with high profits and long-term security. It’s important to remember that no business or franchisee opportunity is a surefire success. Operating multiple units requires a certain type of personality and a certain type of corporate support. People considering a multi-unit investment must do even more due diligence than single-unit candidates to determine if a brand can properly support them. If you’re researching a franchise opportunity, no matter what type of franchisee you think you’ll be, it’s worth considering the multi-unit options and support provided. What you desire as a franchisee today may change in 10 years, and it’s better to be part of brand that can support you as you grow, regardless of what form that growth takes. Ultimately, finding the right fit and the right culture for you is the most critical step in your franchise search. For more detailed information about researching a franchise brand or on the brands featured in this report, please visit us online at www.FranchiseBusinessReview.com.
For more information on this report, visit: www.FranchiseBusinessReview.com | 11
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