Seven Secrets of Running Multi-operation FranchisesOne feature of any franchise is that it represents an easily replicatable business model.
The established commercial idea is already tried and tested. Therefore, for franchisees looking to grow their operation exponentially, one way would be to own and run multiple franchises. This is where the franchisor allows the franchisee to purchase more than one unit or territory. However, instead of simply taking on more work, the franchisee becomes the manager and oversees the day-to-day running of separate franchises.
- Multi-operation franchisees require a higher investment to purchase additional units or territories, yet the potential income is increased. The financial commitment is higher yet so are the rewards, so research the finances thoroughly.
- Multi-operation franchisees need to be ‘in it for the long haul’ in order to realise the economies of scale offered for each additional franchise taken on.
- Most multi-operation franchisees become ‘managers’ essentially overseeing the franchise business rather than getting heavily involved in the day-to-day tasks, therefore franchisees need to be comfortable with this.
- Levels of responsibility tend to be higher than running a single franchise operation. Franchisees usually need to employ staff, own vehicles and premises.
- Franchisees owning multiple operations must have good people skills to manage and delegate to teams successfully.
- Mastering the running of one operation before taking on a second and third is advisable. However, at the other end of the scale, more ambitious franchisees who can expand rapidly are often in a position to take advantage of the incentives offered.
- Ambitious and driven franchisees are the most likely to succeed running multiple operations.
Franchised business models represent far less risk than starting in business alone. They also provide the chance to expand dramatically through multi-franchise ownership. Papa John’s is currently running incentives for franchisees looking at purchasing additional outlets, including some free equipment, a six month royalty break and a marketing contribution which totals an incentive package of around £50K per unit in the designated enterprise zones of the Midlands, the North of England and Scotland.
Written by: Anthony Round, Business Development Manager, Papa John’s
