Just what are the personal qualities that make a successful multi-unit franchisee?

Leadership

Franchisors and franchisees both agree that an effective multi unit franchisee must have strong leadership qualities and great people on the team. Essential traits include talent recruitment and development, being a skilled listener and having delegation competencies.

To be successful, multi unit franchisees must realise they cannot do it all on their own and must be able to delegate with confidence, safe in the knowledge that their team has the skills and commitment to achieve what is required.

Multi unit franchisees that don’t meet these criteria will usually struggle to excel and find the responsibility of running more than one outlet very taxing.

Active involvement

Investor franchisees are not the best choice. Although, multi unit franchisees are not as intensively involved in the business at store level, they should be intimately involved with their business.

Quest’s Nick Suriano has observed a dilution of a franchisee’s focus as additional outlets are established, unless the manager is adequately incentivised, preferably with an equity position in the business.

Cameron Mactier of Optus World shares a similar view, and ideally likes to see a manager being a partner in the outlet they run. He has also observed franchisee complacency emerge from diversity into non-related business activities. This can damage the brand for all stakeholders.

Start with a single unit

Some overly generous and ambitious franchisors grant multi unit franchise rights from the start but this often results in disaster. The result being a shaky foundation, betting on unknowns such as unproven operational and management skills, often mixed with a lack of affinity for the franchised business, and an inability to fund the opening of additional sites.

And it can get worse. In extreme situations, the franchisee doesn’t follow the franchise system, is not a team player, does not attend meetings and fails to establish the additional sites to which they are committed.

All of the current multi unit franchisees studied began with a single outlet and gradually expanded the mini network over time, as their experience, confidence and team grew.

Michael Hibberd has owned five Quest properties over a 13 year period and currently owns two city edge properties. Greg Patterson, has owned seven Subway stores over nine years, and currently operates six stores. Cameron Mactier has established his eight Optus World franchises over 13 years.

Meaningful franchisee support

The franchisor’s relationship with a multi unit franchisee tends to evolve into a partnership over time. Scott Ramsay, owner of five Pack and Send franchises, finds that he has less involvement on the daily operational and compliance issues and a greater emphasis on strategy, marketing, new initiatives and market trends.

You find yourself brainstorming more and constantly looking for performance improvements,” he says.

Some US franchisors have replaced their field staff with specially selected and trained personnel to better service the needs of their multiple franchisees. Subway Australia provides training courses and workshops tailored to its multi unit owners. In fact, it is mandatory for multi unit Subway franchisees to complete a special course at three stores.

Another part of its multi unit owner development program extends to group field visits and think tanks for generating and exchanging ideas.

Typical role of the multi unit franchisee

Committed multi unit franchisees are never far from the coal face. They regularly visit their stores, make frequent contact and are in tune with their staff.

However, their spread of stores does result in less time directly running stores and a growing focus on managing and marketing their business. They will typically liaise more with various people at head office, focus on planning, financial management, marketing and promotion, analysing management reports and developing staff relations.

Strong communication and delegation skills are a common and essential quality among thriving multi unit franchisees. They also tend to be good listeners and sponges for new ideas.

Importantly, they will implement their ideas, because to identify an idea and not act on it has absolutely no competitive advantage.

Overview

In assessing a franchisee’s potential suitability for multi unit franchising, the types of criteria franchisors consider include business performance, business plan, time management, financial capacity, compensation and incentives for field personnel, leadership qualities, delegation ability, compliance record, operating standards, meeting attendance and participation, staff training and development and organisational structure.

Depending on the size of a franchisee’s operation effective organisational structures consist of operations managers, area managers, store managers, training resources, human resources, administration and accounts.