The Perks of Being a Multi-Unit Franchisee
Sep 03, 2024
As a franchise veteran with over 37 years of experience, I have worked with many franchisees. I’m their #1 supporter. I believe that franchising has the power to turn entrepreneurial dreams into realities. In fact, that is part of the American Franchise Academy’s mission: we help franchise owners stress less and profit more. We do that by providing them with industry-leading training, tools, and step-by-step business systems.
Jesse Keyser is living proof of our mission-vision-purpose charter. He is a multi-unit, multi-brand franchisee from Sports Clips, Oxi Fresh Carpet Cleaning, and Little Caesars, and he has decided to invest in one of our educational programs for District Managers.
I invited Jesse to an interview for “Franchisee Wisdom”, part of our Franchise Success Formulas Podcast, a few weeks ago. This playlist is filled with advice from amazing, successful, top-performing Multi-Unit Franchisees who share their franchise journey and all the knowledge they have accumulated.
In this blog post, I want to share some of the perks of being a Multi-Unit Franchisee that Jesse highlighted during our conversation. If you are still wondering if going multi-unit is the right path for you, keep these considerations in mind as you go over your pros and cons.
But first, please subscribe to our YouTube channel and Podcast, and follow us on all social platforms!
1. Discover Improvements
Jesse and his brother and business partner were new to the industry (and to entrepreneurship) when they acquired their first Little Caesar’s franchise unit. The store was a hit, and they quickly decided to go multi-unit. However, the franchisor had another perception of their “success” and made the brothers realize they were not doing as well as they thought.
Why? They were surviving because of their high sales volume and low rent, but their food, paper, and labor costs were out of control. They were at risk of coming through a downturn at some point, and the franchisor knew that if they kept running their business that way, they wouldn’t be around much more.
“We became good operators because of that pressure and guidance”, he admitted. “If we were independent, non-franchised, who’s telling me I’m a bad operator? Like most Americans, I thought I was doing good since my bank account was growing. They gave us the discipline we didn’t have and some understanding about operations. And I’m super appreciative of that”.
If you missed part 1 of our conversation, click here to review his MUMBO’s Best Practices:
2. A Growth Mindset
Another perk of being a Multi-Unit Franchisee is entering a network of people with your same brand in various markets, “so very quickly, you can learn what works, what doesn’t, and what’s profitable”.
You also often get exposed to people who are constantly opening multiple locations, especially if the franchise brand pushes multi-area agreements or actively encourages their existing successful franchisees to open more units or acquire those that are underperforming.
“That makes you think that growing isn’t that hard to do. Then the mind expands, and you set the bar higher and higher each time”.
Thanks to this mindset, Jesse now operates 31 units. And, of course, he wants to keep growing, but he’s not focused on reaching a specific number. “I am all about the bottom line and revenue. I’m more interested in the cash flow to fund other projects”, he explained.
Keep learning: The Role of a Multi-Unit Franchisee in their Organization
3. Valuable Meetings and Conferences
Jesse shared how he has found that every franchise brand’s top performers seem eager to mentor.
“They are willing to give them advice and share best practices. Nothing they’re doing is top secret knowledge. It’s about execution”.
I agree that the top-performing franchisees are willing to share; however, they don’t have much time to dedicate to this. But they tend to go to industry and brand conferences where people network, ask questions, and learn from each other and their leaders, and that’s highly valuable.
Jesse and I actually met in person at the Multi-Unit Franchise Conference, which, if you are a franchisee, is THE conference to go to. I also recommend attending the IFA Annual Convention because they have created a much bigger focus on franchising content.
Also, consider attending your brand conference to build a network and a strong relationship with your franchisor and fellow franchisees.
4. Access to Selling Opportunities
Jesse knows that he could have more Spots Clips units if he grew with acquisitions instead of doing it ground up, building new locations. “I would own three times the Sports Clips I own right now if the units were available and ready to buy at a reasonable price”, he affirmed.
“Just to give you an example. If we doubled the number of salons overnight, that would require four more District Managers and an additional employee for my brother, who handles the back office. I’ve got the bench deep enough, and I’ve got the systems internally. We’re just waiting for that to happen”.
Jesse is very optimistic about this scenario and considers the multi-unit franchisees are “in a wonderful time right now” because, as the boomers are starting to retire from operating their units for over 30 years, selling to a fellow franchisee is an excellent exit strategy.
“There will be people needing to sell. Think about it. Most franchisees got into the industry near their 40s. Give them 20 years, so now they’re in their 60s. Around 65, people tend to think about their retirement,” he explained. “Opportunities will come our way in the next 3 to 5 years just because people do want to retire”.
The franchisor can even tell you about those opportunities because they’ll hear about it first. So if you become a good operator, follow the brand the way you are supposed to, have your systems, process, and procedures in place, and hire great people, your franchisor will pay attention and let you know when the opportunities come, especially if they are in your market or near you.
5. An Objective Look of your Business
“I’m a good operator, but I have closed locations and multiple brands because I built them too close to each other. They were operationally good, but I built them too close to the same brand, so the customers were splitting in half. And as soon as I closed that one, almost all those customers went right over to the other store”, Jesse shared.
Being a multi-unit franchisee lets you look at your business objectively, analyze, design strategies, and make tough decisions to fix your organization.
For example, if you operate 20 units and notice you made a mistake in selecting one location, you can correct the path either by closing or relocating that store. But when the error is in one out of 2 or 3 units, closing is a much more difficult decision that still has to be taken objectively to prevent failure.
Another perk of being a Multi-Unit Franchisee is that if you have 1 or 2 underperforming units, you can compensate for those poor results with all the other stores that are doing well. Therefore, you’ll have a stronger organization, revenue, and profit.
I hope you enjoyed parts 1 and 2 of my conversation with Jesse for our “Franchise Wisdom” Podcast. If you want to hear the complete interview, feel free to click on the YouTube link below, and please leave your comments about this valuable content and what topics you would be interested in learning.
In the meantime, remember that the American Franchise Academy is your ally to help you become a successful Multi-Unit Franchisee, take advantage of growth opportunities, and improve your operations, just as we did with Jesse Keyser and his District Managers.
We offer three training programs: one for Franchisees, another one for District Managers, and a third one for Unit Managers or Single-Unit Franchisees. Reach out to us to discover how we can help:
WATCH THIS VIDEO INTERVIEW on YOUTUBE HERE.
