ADVICE
MULTI-UNIT FRANCHISING
Owning more than one franchise is an attractive
proposition for ambitious entrepreneurs
Linda Whitney reports
M
ulti-unit franchising,
where a franchisee owns
more than one franchise
outlet, is growing.
In 2015, 29 per cent of all franchise
units were owned by franchisees who
ran multiple units, up from 25 per
cent in 2013. Over half of those were
planning to open more. Meanwhile,
one in five single-unit franchisees was
planning to go multiple.MULTIPLE BENEFITS
The franchise model lends itself
to expansion: once you have one
franchised outlet or area up and
running successfully, your experience
and know-how make it easier to open
more. There are economies of scale:
supplies can be bought in bulk and
costs such as marketing can be spread
across several outlets.
What’s more, many franchisors
actively encourage successful
franchisees to go multiple.
Andy Myers, a TransWorld
Business Advisors franchisee with
three franchise areas in Kent, says:
“Having proved I was a successful
franchisee, my franchisor helped me
source funds to buy the new areas.
“It was cheaper to bolt on new
areas than it was to get the initial area
started, because the infrastructure
was already established.”
Food and beverage franchises are
particularly keen for franchisees to
go multiple and some, such as Papa
John’s, offer discounts on equipment
for additional outlets.THINK FIRST
Before you decide to ‘go multiple’,
think carefully, as the extra funding
and work involved can be significant.Also, your franchisor will expect
you to demonstrate that you are
performing successfully in your first
area before agreeing to consider
expansion.
Even with the support of your
franchisor, it may not be an easy
process.
Euan Fraser of AMO Consulting,
who chaired a panel at last year’s
multi-unit franchising conference,
says: “In the USA, the franchise
operations manual usually includes
guidelines about when and how
franchisees should be preparing for
it, including employing extra staff and
prospecting for extra business, but
in the UK these kinds of guidelines
are rare. With multi-unit franchising
growing fast, UK franchising needs to
sort this out.”MAKING THE MOVE
Think about when you should move
and where your new franchise area
should be. It makes sense to target an
adjoining area, if available.
Elio Auletta, a Snap-on franchisee,
started 20 years ago as a ‘man in a van’,
but now has four territories, which he
runs as a management franchise.
Elio says: “My expansion
plan always involved occupying
neighbouring territories. That way, my
time is best utilised and my franchises
can support each other.”
Andy, who is based in Tonbridge,
says: “Having neighbouring territories
delivers synergies and makes it easier
and cheaper to travel between them.”CHANGING THE
WAY YOU WORK
Going multiple means transitioning
from an owner operator to a manager.Andy says: “We are now a team of
four and likely to grow. When you are
going multiple, you need to find team
members with the right qualifications
and experience, but also who care
about your brand and reputation as
much as you do yourself.”
Elio’s initial expansion was enabled
by employing his son, Marco, and later
his nephew, Andrew, as his assistant.
“This allowed me to focus more on
business development and identifying
opportunities to expand - both in
existing territories by improving sales
and service and by working to find
the most suitable option for my next
expansion,” Elio says.GOING MULTI-BRAND
Investing in franchises from different
brands is also a way of going multi- and it’s becoming more common,
especially for high investment
franchises. Almost 30 per cent of
UK franchisees hold more than one
brand (over 50 per cent in the food and
beverage sector).
It may be easier for franchisees with
less deep pockets to go multi-brand
with a multi-brand franchisor such
as the Dwyer Group, which offers the
Drain Doctor, Mr Electric and Aire
Serv franchises.
Steve Barlow and dad Stan run a
family construction company, Tee
Limited, plus a Mr Electric franchise
and now also have an Aire Serv heating
and air conditioning franchise.
Steve says: “We are in Cornwall, so
the Aire Serv franchise helps maintain
our levels of business in summer,
when tourist accommodation
providers don’t want electrical work
done around guests. It also means we
can offer more to customers.