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Should You Go for a Single Franchise, or Multiple Development?

Written on January 15th, 2008 by Joseph in Franchising Developments.

When franchising business started, many of the units, especially in the food industry segment, were mom-and-pop establishments. They profited well to continue their existence in the franchising field, but the franchisor had to work doubly-hard in order to find new franchisees in that area. That is why franchising companies are looking more and more towards multi-unit operators to encourage the potential franchisees to dream it big. But whether you want to start as a single- or multiple-franchisee depends on several factors. The foremost among them is obviously the financial factor. But that can be easily fixed.

Multiple units need more money to start than single-unit franchises. Moreover, multi-unit franchisees have lower risk factors, as their operations are spread out in three or more locations. Hence, financing companies are eager to help them, as they see them as long-term players. The franchisors also actively encourage multi-unit franchisees by lowering the franchise fee and other costs. What’s more, multiple franchises represent more buying power; hence, they get better deals from every department, whether from the real estate agents or from the contractors. They can also buy in bulk amounts and can rotate the products between their stores before re-ordering.

But the problem with multiple franchises is that, you need to have major experience in the field of business to become one. While single-store owners can be naïve, a multi-unit operator is supposed to know the business scenario around him properly to start his operations. He/she, of course, has to spend more time and energy in the business than a single-store owner. If you have joined the franchising industry in order to spend more time with your family, then being a multi-unit operator is not your forte. Still, a multiple franchise-owner has all the rights to expand in more than one territory whereas a single operator has very limited chance of expanding his business or sub-franchise.

If you want to know more about the industry and examine which type of franchise is suitable for you,
contact brandEXPANSION .

2 Responses to “Should You Go for a Single Franchise, or Multiple Development?”

Franchising is a Risk Worth Taking | Franchise Ultra Lounge - Franchise Social Network Left at 10:38 am on January 15th, 2008
1

[…] order to learn the right ways for the next time. Opening another franchised unit or turning into a multi-unit franchisee is also another risk worth […]

Franchise Ownership is Getting Eaiser | Franchise Ultra Lounge - Franchise Social Network Left at 11:48 am on April 4th, 2008
2

[…] witnessing the success of the first or can become an area developer. They can commit to developing 2 or 3 locations within a stipulated time. Here, even the owner-operator criterion is not becoming an obstacle in […]