Multi-Unit Franchising Is a Savvy Investment Strategy: Here's Why

Multi-Unit Franchising is a Savvy Investment: Here’s Why

Interested in multi-unit franchising? It can be a lucrative strategy for the right investor. Learn more about how owning more than one franchise unit can pay off.

What is Multi-Unit Franchising, Anyway?

You may have heard franchising is a good way to make the most of your investment in a business, but did you know that owning a multi-unit business can offer an even better opportunity to maximize growth and profitability? If you’re a shrewd investor looking to make a bold move into the big leagues, read on.

A multi-unit franchise business is born when a franchisee buys the rights from a franchisor to own and run more than one unit of their brand within a designated territory. The arrangement can be profitable for both the franchisee and the franchisor. Both benefit from an expanding business and economies of scale. A variety of business types, seeing the potential for growth and financial reward, utilize the multi-unit business model. Some examples include home health care, home, and office cleaning services, gyms and fitness studios, flooring services, restaurants, cafes, and barbershops.

The Pros and Cons of Owning More

If the idea of owning more than one unit of a franchise business is piquing your interest, there are some things to keep in mind as you look for a worthwhile investment opportunity. As with everything in life, there’s a plus column and a minus column. Let’s consider:

Pros: Your chance of success increases the more units you own. Economies of scale reduce operational costs, and you gain collective buying power as a member of a franchise family. You’ll also have clout in the franchise since multi-unit owners are typically generating more income for the brand (and themselves) than single-unit owners. Your return on investment is greater due to lower costs and the likelihood of success.

Cons: Your investment is greater when multiple units are involved, so meeting the financial requirements can be a big hurdle for some investors. As the owner of a multi-unit business, you can’t be everywhere all the time; you’ll need to depend on qualified and trustworthy employees to help you manage your multiple locations. Someone who has owned a business before or who has worked in management has an advantage, since multiple businesses mean you’ll be working on a larger scale, overseeing staff across units, and have more skin in the game.

How to Make It Happen: The Keys to Success

If you’re starting to see the wisdom of multi-unit franchising, you’ll want to know how to make it happen. A lot goes into the decision to purchase one franchise over another. Let’s look at some keys for choosing a brand that fits your goals:

Brand reputation: With so much competition for consumers’ attention, you’ll want your product or services to stand out for all the right reasons. Research how a particular brand is viewed in the marketplace and make sure you aren’t putting your money into a business damaged by conflict or scandal. A business with a sterling reputation with customers sets you on a path toward profits.

Brand recognition: Buy into a recognizable brand and you won’t have to do the legwork of making yourself known to your customers; you had them at hello. Research a company’s leadership team and their plans to market and grow the business. A visionary team will have their eyes on development and preserving quality.

Customer demand: Is there a market for what the franchise offers, and do the products and services meet your customers’ demands? Satisfying a range of consumer tastes and needs while staying true to your brand identity will help you grow your customer base.

Business blueprint: A thriving business has a business plan that’s been finely tuned through trial and error. As a multi-unit franchisee, you’ll gain what the franchisor has learned from past failures and successes. They’ll support you in executing that plan, from opening your units to sales, marketing, and training. Talk with other brand franchisees to see if they’re happy in their relationship with the franchisor and meeting their goals.

Location is everything: Open your units in prime locations. Does the franchisor you’re interested in have available territories and growth opportunities for multi-unit ownership? Do they offer financial incentives to multi-unit investors? Certain franchisors are actively seeking investors wanting to grow on a grand scale.

Scissors & Scotch: The Savvy Investment You Seek

At Scissors & Scotch, we offer classic men’s grooming with a new age twist and all the advantages of franchising. More than a barbershop, we’re a barbershop with a bar looking for entrepreneurs ready to grow this kick-ass business with us. If you’re interested in opening multiple Scissors & Scotch locations within a territory, you’re our new favorite person. Get started today.