Expansion of business through franchising is not limited to the franchisor alone, but also to the franchisees. Recently, the concept of multi-unit franchising is on the rise in India. Many single unit franchisees are taking this way towards expansion. Le
Multi-unit franchising is a concept of having more than one franchise outlet of a brand. If an existing franchisee runs a single outlet successfully and is looking for expansion, then one opts for multi-unit franchise. The franchisee does so by taking the rights from the franchisor to open outlets in other geographic locations. Franchisors also show willingness in offering the rights since the brand has already made a successful existence in the market, thus, solving the problem of the franchisors to search for more capable franchisees. Moreover, the franchisee also benefits as the franchisor might give the rights at a reduced franchise fee for the success owned. Dipti Taluja, Multi-Unit Franchisee, Madame said, “It is a wonderful feeling to be a multi-unit owner. Running a successful business with support of the franchisor and colleagues, gives you a sense of being independent. It adds to a sense of security and a trust on one’s own entrepreneurial skills.” After becoming a multi-unit owner the franchisee is less involved in the day-to-day operations of the unit. Instead he/she manages operations and decisions at the higher level. In this concept, the franchisees are not restricted in opening outlets in single city rather can expand in other cities also.
Is multi-unit franchising suitable for all franchisees? Despite the advantages of multi-unit franchising, the concept is not ideal for all the franchisees as it requires more investment of time, energy, and greater responsibility. So, one is suggested to opt for multi-unit, only when the aspirant has the required management skills, strategic potentials and financial resources to go for.
Benefits of multi-unit franchises
Some of the advantages of owning multi-unit franchises are:
Hurdles on the way
In spite of merits of multi-unit franchise, there are few hurdles in this concept. To name a few:
Time allocation: With multi-units functioning simultaneously, the franchisee might face problem in devoting equal amount of time to its outlets. This could affect the business adversely. Thus, investment of time is one of the shot-falls in multi-unit concept.
Managerial problems: Having many outlets demands the franchisee to employ managers for the outlets. Hiring too many managers need a lot of investment. Not only that, as having managers to look after outlets is advantageous but at the same time they need to guided on a timely basis which could be problematic at times.
Maintaining success: The multi unit owner may not earn profits equally well in all his/her outlets. Therefore, the franchisee can face more of pressure from the franchisor to buck up the sales and services.
To conclude, it can be said that a number of today's franchisees are highly experienced and successful business professionals who are strategically building their own small franchise empires. If the franchisee has the desired determination and managerial skills, then multi-unit concept is a better way to expand one’s business enterprise.