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Managing Changes That Come with Multi-unit Growth

During this week’s edition of Proven Match’s blog, we’re going to delve into the topic of managing changes that come with multi-unit growth. But first and foremost—what a problem to have, right? The rise of the multi-unit franchise phenomenon has been underway for well over a decade. Recent statistics show that just over half of all franchise operations in the U.S. are now inclusive of more than one unit. It’s especially common in the QSR industry, with over three-quarters of all franchises arrayed in a multi-unit ownership agreement.

There is some reasoning behind the uptick in multi-unit ownership. During the years of the Great Recession, single-unit franchise operators obviously suffered in the lean economic times. Many brands found that multi-unit franchises, with their elevated sales volume, were able to weather the storm. In addition, multi-unit franchisees can insulate themselves against a downturn in business with their own shared resources.

Many franchisors even offer excellent incentives to attract the multi-unit owners to their corner. But as these franchisees are recruited, how will they cope with managing the changes that come with multi-unit growth strategies?

Greater Risk/Greater Reward

It goes without saying that there is, of course, the risk involved in owning and operating a franchise. That risk multiplies in the multi-unit space, as owners will be expected to finance more debt or capital. The upside is that profitability has greater potential as well. If the multi-unit franchisee sticks to the business plan while managing true scalable growth, all should go according to plan.

A Real HR Department

Naturally, with more locations comes more employees. And just as any good boss knows, personnel issues can actually play a significant role in the amount of time spent dealing with problems. This will obviously be magnified under a multi-unit operation. However, many multi-unit owners tend to seek a distinct solution in the hiring of a full-time human resources executive to handle these and other issues. A well-trained HR hire can work wonders for ensuring a smooth operation, while at the same time maintaining a unique corporate culture.

Transitioning

As a franchisee contemplating a multi-unit strategy for growth, can you really transition to a different kind of role? Single-unit franchisees are often hands-on, delving into every aspect of running a successful operation. However, multi-unit franchising is based on the premise of growth and profitability. As one executive who made the switch offered, “You have to be able to work on your business, as opposed to in your business. In short, you won’t have blinders on, but rather will be handling a bird’s eye view of a much larger operation. Do you trust yourself enough to thrive in this new role? If the delegation of key tasks is something that does not come naturally to you, you could be setting yourself up in an aggravating situation.

There’s plenty of reasons why multi-unit franchising is on the rise in popularity. After all, franchisees enter into this world to become their own boss, take the reins of their financial future and achieve profitability. Multi-unit franchising can help you get there much quicker, but it does come at the expense of a whole new outlook and set of business skills. Sustainable and scalable growth will always be the driving factor of success in business and multi-unit operations can play a role in getting you there quicker—so long as you’re prepared to meet the unique challenges you’ll have to face head on.

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As a franchisor, you’ll want to know which existing and potential franchisees best fit your business concept. Proven Match is the proven solution in determining those factors. Through our proven behavioral assessment techniques, predictive analysis becomes the predictive success for your franchise concept. If you’re ready to show your leadership by getting started, give us a call and we’ll put you on the path to a more productive year in 2017.

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