As a current franchise business owner, you might be wondering, “Should I consider multi-unit franchise ownership?”. If you enjoy the process of growing franchise businesses, this topic is probably on your radar.
What is a multi-unit franchise owner?
A multi-unit franchise owner is an entrepreneur who owns multiple franchises at one time. Typically, the term describes an owner who buys a second location from the same franchise brand, often within a single territory.
However, multi-unit franchise ownership can also apply to franchisees who branch out to other brands for their second business. Many franchisees in this situation choose businesses that target the same consumers that their first business does but that offer a different set of products, services or solutions to them. For example, someone who owns a high-end daycare franchise might choose to invest in an entertainment brand that serves young children and families next.
With both types of multi-unit franchise ownership, franchisees will need to leverage great managerial and organizational skills. And, you’ll need to hire a team of employees you trust to operate the businesses.
Benefits of owning multiple franchise businesses
The multi-unit franchising model presents many benefits to small business owners. So, if you are wondering, “Should I consider multi-unit franchise ownership?,” keep these tips top-of-mind.
- Potential for more wealth: Opening a second business means opening the door to more potential wealth. Franchises offer an established structure and brand name which can contribute earning profits more quickly.
- Applicable experience: People who already own one franchise business are well suited to owning another franchise. Whether you purchase a second unit as your first franchise or you branch out to a new franchise system, you’ll be entering the market with a deep understanding of your target customers and the best ways to serve them.
- Diversified revenue: Owning multiple franchise units allows you to diversify your revenue streams within your given territory. If you operate multiple units under the same company, you can tailor your client verticals to target different market segments. If you own franchises from different companies, your revenue will be further diversified by offering different products and services.
- Lower operating costs: Owning multiple units under the same brand can translate into greater operating efficiencies, saving you money on operating costs. You might be able to run a single marketing campaign that benefits all your businesses in a given area. Or, if you need to “share” inventory between locations while you await a shipment, you’ll be able to do that and keep both businesses running smoothly.
For well-capitalized entrepreneurs, multi-unit franchising can be a smart—and profitable—investment. If you need to discuss funding for your next franchise, turn to Tenet Financial Group. Contact us today to learn about our funding products.