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Multi-unit franchise ownership: what are the benefits?

Multi-unit franchise ownership: what are the benefits?

For new franchisees, expansion of the business to additional territories might not be at the top of the list, but it should be an area to consider when choosing which franchise to invest in

Multi-unit ownership is typically the most natural way of growing your portfolio to create a business empire that can deliver a return on your investment in a whole manner of ways. Perhaps the most obvious reason is to generate profit, allowing you to live a life you wish to lead, but there are several other benefits of joining a franchise with the potential for investing in multiple territories.

“Operating more than one franchise unit certainly needs strong organisational skills so we’ll typically assess how a franchisee does in their first year before agreeing to them expanding into additional territories,” says Mike Ryan, CEO of logistics franchise, PACK & SEND UK. “Multi-unit ownership is an attractive opportunity for many franchisees who might be looking to grow a business empire but feel more confident concentrating on one brand rather than a multi-brand portfolio. By using the expertise that they have developed through our training and support, plus, successfully running their first franchise, launching subsequent territories is a natural progression for some of our franchisees.”

Mike discusses the four key factors for prospective franchisees to consider when their long-term aspirations include multi-unit ownership.

Multiple units translate to higher profits

Whilst taking on more franchise territories brings with it additional risk factors, as with all business ventures, that is counterbalanced by the opportunity to multiply profits. The math is simple: the more locations you have, the wider the market opportunity and the more sales you can make. Additionally, having multiple franchise locations can help to counteract any weaker sales from one area with a stronger performance from another.

Economies of scale

Anyone who has ever shopped at a wholesale store knows how much cheaper it can be to buy in bulk. The same holds true for multi-unit franchisees. Whilst buying supplies for multiple sites may seem as though it would only increase outgoings, vendors will be more willing to offer deals to regular customers who buy in bulk. In this way, you can actually end up saving money overall by making larger purchases. That, combined with the buying power from the franchisor, makes a very attractive investment opportunity.

Sharing the workload

As your business grows, so will your workforce. In many cases, this means you can distribute the workload to managers and employees across multiple locations. Whilst you play your part in increasing employment opportunities in the communities where your franchises are based, you also benefit by being released from some of the day-to-day operations by your team so you can focus on other tasks to ensure your business runs like a well-oiled machine.

Shared marketing

Marketing a multi-unit franchise operation is just as simple as running activities for a single territory. Whilst digital marketing makes extending the reach to audiences in new locations very easy, you’ll also be able to run consistent marketing messages across your full marketing mix when you choose print, direct mail, email or broadcast activities. Deborah Dudley, our Salford-based franchisee, is soon to add a neighbouring territory. By extending the reach of her current marketing strategy for Salford, she can attract the attention of customers across the entire Greater Manchester region in one fell swoop.

PACK & SEND franchisees have been operating throughout the pandemic leading to several of them feeling confident to take forward their plans to become multi-unit franchisees. Earlier this year, brothers Aneel and Shahzad Memon decided to take on a second franchise territory. Unlike Deborah, they didn’t choose a neighbouring territory to their original location in Hall Green in Birmingham. They decided to take a territory in Lincoln, with Aneel leading its development while Shahzad remained in Birmingham. In March, the owner of PACK & SEND’s Elephant & Castle franchise, Daniel Savi, started his multi-unit journey by buying the existing Richmond service centre.

“I was very satisfied with the Elephant & Castle service centre performance. Since opening in December 2016, we’ve seen consistent growth and built a good base of regular customers, resulting in dozens of very positive reviews on Google and Trustpilot.,” said Daniel. “I knew I could replicate its success in other locations in London thanks to the combination of the strength of the franchise model and my experience.

“I’ll be bringing in managers to run the operational activities, whilst I concentrate on the coordination of the two stores. The main benefit of opening a second service centre is to ultimately reduce costs, increase our visibility and provide even better services to both current and potential customers.”

Aneel echoes Daniel’s words: “The Hall Green service centre has built a loyal group of customers since we launched just over a year ago. This is hopefully the first of many for us as multi-unit operators and we are both extremely excited for what’s to come.”

From May 1 until May 31, we’re celebrating all things multi-unit franchising! To be informed of exclusive new content, make sure to sign up at the official Multi-Unit Month site here.

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