Multi-Unit, Multi-Brand Operators Are Leading a Trend of Investing Beyond Their Original Sectors
What if I told you that your best franchise development prospects may already be very successful franchisees? Just not in your sector.
Franchise Business Review (FBR) recently invited people to make franchising predictions for 2025. I anticipated all kinds of forecasts related to AI and technology adoption, private equity investments, access to capital, hiring and retaining talent and more. But without hesitation I predicted something else. And perhaps it was so obvious that it was hardly calling attention.
I call it a multi-sector movement. And it has serious legs.
Restaurants and Gyms
A year ago, November 2023 to be exact, Flynn Restaurant Group made headlines with news of its latest mega acquisition. On the surface, that wasn’t earth shattering. As the world’s largest restaurant franchisee, the organization had made hefty additions on multiple occasions across well-known brands such as Applebee’s, Taco Bell, Pizza Hut and more.
This time, however, was different. The company announced the acquisition of 37 Planet Fitness locations and, in doing so, also changed the parent company name from Flynn Restaurant Group to Flynn Group.
I’ve waxed on before about the power of multi-unit, multi-brand owner/operators called M.U.M.B.O.s. And they are ever-present across the restaurant sector. It’s not uncommon that an expertise for owning and operating multiple restaurants can evolve into doing so with multiple restaurant brands. Or multiple hotel concepts. Or multiple home service brands. Or multiple insert-sector-here. But the move by Flynn Group sparked nuance. I looked for it and found it elsewhere too.
Thus, my FBR prediction: “MUMBOs don’t just know how to run great businesses in a certain sector. They know how to run great businesses…period. And they will look for franchise opportunities with great unit-level economics in a multitude of verticals. Expect more of that. Much, much more!”
A diversity of investments across brands has been appreciated for some time. But the diversity of investments to other sectors may be asking for a spotlight in 2025.
Exactly how diverse?
Sandwiches and Real Estate
Take Chris Paret and his successful journey with sandwiches AND real estate.
In 2017, Paret left his job and bought three existing Subway shops in a resale. By 2020 he bought four more. He closed one due to the pandemic and kept right on going. Next was MY SALON Suite, where he has opened two locations and used them as a vehicle to help numerous other entrepreneurs become business owners through leased spaces designed to the hilt.
Making and selling a foot-long meatball sandwich seems worlds apart from the general contracting talents of building and leasing salon spaces to other entrepreneurs. However, I’ll argue that mastering the art of unit-level economics with both is the common thread. Plus, one investment comes with an added bonus. Paret doesn’t have the employment and shift work challenges of his restaurants at MY SALON Suite. And that ease of operations is attracting more investors from other franchise sectors as well.
Haircuts and Joint Pain
Need another example? Take Jerry Akers and his journey with haircuts and joint pain.
A very successful franchisee with 34 Great Clips locations, Akers built an empire doing one thing and one thing very well. That is until he added The Joint Chiropractic as both a regional developer and multi-unit franchisee to his roster. Now he’s a veteran of multiple brands in multiple states and has elevated his children over operations of the Great Clips investment too.
Granted, there is a big difference recruiting and staffing someone with a license to cut hair versus a Doctor of Chiropractic degree. But both services meet an important consumer demand being delivered by a reputable business with a well-known brand. Ah, the beauty of franchising.
Akers has certainly earned his stripes. In fact, he’s now a regular on the speakers’ circuit at franchise events sharing that expertise with others. Tell me that’s not a sign of more to come from others who aspire to be just like him.
According to the 2024 Franchising Economic Outlook from the International Franchise Association, an estimated 15,000 franchise units were predicted to open this year. Those weren’t from 15,000 rookies. Many of them were MUMBOs, and I predict they will continue to expand their investments not only with different franchise brands, but also in different sectors.
Happy New Year to that kind of experience driving that kind of diversity.
