Should your franchise business encourage multi-unit franchisees?

By Sarah Stowe | 10 Feb 2016 View comments

Is a multi-unit strategy a good franchise idea? Image: franchising.comWhat are the benefits for the franchisor of embracing a multi-unit expansion strategy? Founder and CEO of Poolwerx, John O'Brien, shares his views.

A franchisor can benefit greatly from underpinning growth through a multiple business development strategy. Sixty five percent of our franchisees are multi-unit owners and it has been central to our growth.

If you open your business to multi-unit franchising the calibre of people it introduces improves, they have more to invest with and generally their vision is very clear. They come into the business knowing what they want. It’s an opportunity to recruit applicants that will grow your business harder and faster.

It also saves on recruitment and training as you don’t need as many development and field people to support the network because they are working with a smaller pool of bigger franchisees.

Another benefit is that it assists with increasing the longevity of franchise terms. In our business it has helped us push this to over eight years, and growing, which is above industry standard.

Multi-unit franchising also allows the calibre of support staff to improve as you are able to shift the full focus from compliance to more support and mentoring. Many of our business development managers have previously been a franchisees in our system or another.

What difference does it make to the profile of franchisees you recruit and to the development of the model?

In my experience offering a strong career path that includes multiple units does change the calibre of franchisee you can attract in the business.

Our model is specifically designed to allow franchise partners a strong career path from mobile to multiple store owners allowing them to develop a business as big as their vision determines.

This was a deliberate strategy we developed to provide a competitive advantage for our business and it has certainly worked.

Poolwerx has won the FCA Multi-Unit Franchisee of the Year Award three times in 2012, 2013 and 2015, as well as being a finalist in 2011 and 2014.

We have profiled our top franchisees and know what combination of skills and attributes they need to succeed. While it’s very hard to find all of them in one person, most of our business owners are husband and wife teams who as a combined force, possess the right skills and attributes. As a result we now always profile a couple even if one of them is not planning on starting in the business initially.

How do you deal with multi-unit franchisees?

You approach multi-unit franchisees like any other franchisee; as a business owner. They are always very driven people so it’s about sharing the journey with them, being honest and mentoring them as much as possible. 

In our business we term them intrepreneurs – somebody who strives to be their own boss, to experience the freedom of running their own business but doesn’t want to start from scratch to achieve it. They realise they can have the business success they desire within an existing structure. The key therefore, is to ensure the structure is right that you have better sales, better marketing and better buying to provide the level of support they expect. 

You need to be constantly on your toes seeking ways to raise the bar and help improve profitability.  Our regular franchisee satisfaction surveys ensure we know how we are performing and where we can improve. 

What are the greatest challenges of this strategy?

In my opinion there are not too many challenges that a committed franchisor could not overcome if they were interested in pursuing this strategy.

If I had to name one though, getting a head office team capable of working with multi- unit business can be time consuming. They need to have the right level of business or franchise experience to do more than just support the team. They become more like advisors and mentors. Over the 12 years we developed our multi-unit offering there have been a number of staff upgrades to accommodate our growing calibre of franchise partners and it has always benefitted the business. 

Secondly, there needs to be constant innovation and a focus on profitability to improve the experience and opportunity for both the franchisee and franchisor. I believe this is mainly the franchisors responsibility, as it is a key factor in maintaining high levels of franchisee satisfaction. You always have to have ‘the next thing’ tied up in a bow and ready to roll out.

The advantages of this business development strategy far out way the work required to support it properly and I honestly don’t know why more franchisors don’t utilise it.