Advisory May, 09 2014

Why choose multi-unit franchise model

Are you running a franchise business and wish to add more brands or outlets to your kitty? multi-unit franchising is an apt business model to adopt. multi-unit franchising & Area Development is gaining immense popularity in the country these days. Read on

By Yamini S Verma, TFW Bureau
Sr. Sub-editor
Why choose multi-unit franchise model

These days, franchisors are optimistic in offering multi-unit franchises to potential investors as this business model brings in great returns to both, the franchisee and the franchisor. The model of multi-unit franchising demands for more time and investment along with the responsibilities for the smooth operations of the business.

Multi-unit franchising has proved to be a boon for most of the people who have opted for it. It is just because it brings along great returns while strengthening strong business network pan India or the areas allotted. This franchising model somehow also promotes cluster network, increasing the brands presence in particular areas and regions.

Sharing his views on cluster franchising, Vasanth Kumar, Executive Director, Max Retail India says: "We strongly follow cluster franchise network strategy for brand strengthening. For future expansion also we are looking at multi-unit franchisees pan-India. We believe that a franchisee developing an assigned area can do a better job than a single unit franchisee. In Kerala, we have two master franchisees that are responsible for developing all the franchise network outlets across Kerala and we are satisfied with their performance."

Vinod Kapoor, a brand loyalist of Titan Company Ltd, has partnered with them from more than three decades for operating multi-unit franchise stores of World of Titan, Tanishq, Helios and Titan Eye Plus in Chandigarh and Panchkula.

Discusing in detail about his experiences as a multi-unit franchisee, he says: “I always wanted to do a retail business by associating with some renowned brand. In 1979, Titan took out an advertisement calling for partners and as it was a desired retail brand, I grabbed the opportunity and took their franchise. Since then, there is no looking back,” says Kapoor.

 “The journey has been wonderful with Titan Company Limited. Though there have been ups and downs. I also took franchise of Arrow, Samsaara, Satya paul and Hunt- an accessories brand but could not sustain them due to various reasons,” he adds.

Advantages and disadvantages

Operating a multi-unit franchise is easier to run as the franchisee is familiar with the system's operations, policies and procedures of the brand. A single store brings in the 100 per cent risk factor but with opening multiple units, would divide the risk factors as well as the returns among all the outlets. This way, if one outlet is not doing well, the deficit can be covered up by the other stores.

Apart from multi-unit franchising, there are brands that are growing great via area developers and master franchisees yielding rich dividends. JumboKing, an Indian vada pav brand believes that every city with a population of over 10 lakh must have one city Master Franchisee for its brand. Dheeraj Gupta, MD, JumboKing says: “Our master franchisees will have to submit a business plan to demonstrate that the city he/ she besides in and the adjoining areas can support a minimum of 10 and up to 30 Jumboking stores. If population is less than Rs 30 lakh, then the master franchisee can club in the adjoining districts and develop a total of 30 stores. Of these 30 stores, the city master franchisee has to retain three stores as directly owned and operated by him. The sub-franchisees opened under a city master franchisee will be fully supported by him.”

Franchising is a time-tested business model and when done for the right reasons and with a truly co-operative spirit, it creates value for all its partners. “Our biggest successes in the recent past have been attributable to the city master franchisees and hence, we are expanding aggressively with that model,” adds Gupta.

FoodJockeys LLP brought the American Coffee brand; Classic Rock Coffee Co in India via Master franchise route. The brand recently started franchising in India. Avinash Agarwal, CEO of FoodJockeys, the Master franchisee for Cocoberry for parts of western and southern India says: “It’s a proud moment for us. This year we plan to open at least 8-10 more outlets of Cocoberry in our territory. Cocoberry is one of the fastest growing Health and Wellness food brands in the world.”


Meanwhile, if the experiences of all the above franchise professionals have stirred up your spirit and your inner voice provokes an affirmative ideas to take up this business model of multi-unit franchising, then you must take a step further. Your entrepreneurial spirit will lead the way for you. Happy Franchising!!!

Words of wisdom by successful franchisees

·           Do your homework well.

·          Always monitor RoI on regular basis.

·           Give 100% to your work as a franchisee.

·           If you want to be successful you have to make the brand your priority and have to dedicate 365 days a year to your work.

·           Study the industry growth and the potential for the particular brand.

Related: How can entrepreneurs have direct Access(ories) to profits?

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