Advisory Sep, 29 2009

Is multi unit franchising fit for you

Are you running a franchise and further wish to take up more. Go ahead and talk to your franchisor and be the proud owner of multi units. Tagged as Multi Unit franchising it is gaining immense popularity in the country these days

By Neha Malhotra
Sub Editor, Franchise India Holdings Limited, Web Division
Is multi unit franchising fit for you

Franchisors now days are bullish in offering multi unit franchises. For them it’s a better prospect whereas for the franchisee it means devoting more time to work, being more responsible and more accountable to the franchisor. Those who can live up to these responsibilities are the potential franchisees every franchisor would be looking forward to associate with.

What is Multi Unit franchising?

Multi-unit franchising is a category of franchising where a franchisee purchases more than one franchise from a franchisor. This is a very prolific technique of franchising because if things work out then it will bring gains to both the franchisor and the franchisee creating a win-win situation for both.

Building your empire

If you’re wondering whether this format of franchising is for you or not, then we’ll make that decision easier for you. If you have the right set of skills, have pragmatic and determined goals with the right kind of people to bank on and enough capital to fund your goals, then you’re definitely game for it.

The Highs

This format has proved to be a boon with most of the people who have opted for it. It’s because it has tagged with it the advantage of providing opportunities for swift and proficient growth. Firstly as you're familiar with the system's operations, policies and procedures, it makes it a much easier task to open and operate at additional locations. When you operate just a single store, the risk factor is 100 per cent but with opening multiple units it gets divided among all the locations. This way if one outlet is not doing well, the deficit can be covered up by the other stores. This would also give you access to more cash in hand which you can use to meet requirements of any of your stores. You can also benefit on the regional marketing front as you can draft combined strategies for all your stores.

The Speed Breakers

You might be thinking that if you have more locations it would mean more profit but you must not forget that it would also mean more expenses and more management needs. Money can be the biggest concern for setting up multiple units as it will call for a greater investment not just for the opening of stores but also for their day to day functioning. You need to build up good relationship with the banks and finance companies which would come to your rescue in such a situation. When talking of opening an outlet, maximum importance is given to location. Multi unit franchising works best if you have numerous locations at your disposal. With greater number of stores comes greater responsibility, so you need to build up an efficient employee force to carry out the work with precision. Of the employees, your managers will play the most pivotal role as it is them who will have to make sure that all the work is taken care of as it needs to be done as you cannot be present on every location at every time. So managers should be such who can serve as an extension of you. Finding such people can be a cumbersome task though not impossible. In today’s time, you are engulfed with indefinite franchise options but not all will have the capability to support a multi unit franchise system. So a thorough analysis of the franchisor’s potential should also be an agenda on your list of do’s while finalising a franchise deal. Though all these hurdles can lower your morale, you don’t need to worry as these can all be dealt with if you can plan everything beforehand.

Winding Up

If after going through all of this, your inner voice provokes an affirmative answer then you must take a step further. Your entrepreneurial spirit will lead the way for you.

Related: Think global act local in franchising

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