Franchise

Multi-unit franchise operators are on the rise. Some buy multiple units in the same brand. A few buy more than one franchise in different but competing brands. Others buy multiple units in totally different sectors.For the franchisor it is highly advantageous to have a successful site operator running more than one unit. Once a franchisee has proven their mettle in one territory chances of success in multiple territories are higher.Less training time is required when a franchisee buys their second unit. The franchisee has already done the initial training course and also possesses real live knowledge of operating the business in the field.For the franchisee the advantage of owning more than one unit is that they have already operated the first unit profitably. They know the upsides and downsides of the business model. They already have established close relations with the franchisor. They understand in more detail the demographics of the areas the business model is likely to work in.Advertising and printing costs can be spread out over a number of sites. It also becomes possible to use higher cost advertising like radio and TV when you can spread the cost over a number of units.A multi-site operator also benefits from have greater buying power. It is possible to make significant savings by buying in bulk making each individual unit more profitable.The worst type of multiple site owner is one that is under-capitalized and trying to grow on a shoestring budget. This can be disastrous for both the franchisee and the franchisor when and if the money runs out.For experienced entrepreneurs who do possess people skills, can manage large amounts of data and have deep pockets it makes sense to buy more than one unit. They can expand their business and multiply their profits.

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