As a multi-unit operator, you may have decided it’s the right time to transform your franchise investment with increased sales, to open new units or expand into a new brand. This shift should be rooted in a high-level strategic vision on what you want to see as a result of your growth as a franchisee, and how you want to transform your business portfolio.
As an experienced franchisee and operator, the key to making the next leap in your franchise career is ensuring you are being as deliberate and strategic in your growth as possible.
Find a brand that is doing well financially
This first strategy may seem like the most basic, but it also the most important. Even the most experienced and savvy owner-operator with his or her eye on growing and transforming a franchise portfolio won’t succeed without prioritizing a concept that is financially soluble. This starts with thorough research into an FDD, but expand your research to include in-depth conversations with existing franchisees. Find out exactly how they’re making their money to make sure your growth with the franchise holds the same fiscal future.
Know the leadership involved
Before you buy into a concept, don’t limit your interaction to the salesperson. You should take time to familiarize yourself with the entire leadership team – from CEO to senior VP of franchise development to the main corporate marketing team involved in franchisee support. You should know the people behind the brand and where they’re going strategically, as well as be assured you share the same values. For example, if you want to grow but the leadership team of the franchisor is selling only one unit at a time, it might not be the fit for your vision as a multi-unit franchise owner.
Spend time getting to know the vision
As you get to know the people behind a brand, you’ll develop a better sense of the overall vision of the concept. If your focus as an entrepreneur is to find ways to continue growing and transforming your franchise portfolio for success, make sure your vision as a business person aligns with the vision of the franchisor.
Your investment ratio should be 2:1
If you can find a concept that has a two-to-one sales to investment ratio, you may have found a brand that will leverage your goals as a multi-unit franchisee. For example, if a concept costs $500,000 to build, and the average unit-per-volume is $1 million, that can be a good indicator of steady financials that you should take into account alongside more intangible such as vision and values of a franchisor leadership team.
Hospitality is the foundation
If your franchise concept provides a service, and in many cases a product that is experiential in nature, it is critical that anybody that’s going to grow his or her franchise footprint sees hospitality as the foundation. Entrepreneurs may get caught up in adding more units, getting operations ironed out and identifying concrete markers of success, but if you don’t spend time hiring and putting in place operations staff with a hospitality mindset, the pure numbers may let you down. Multi-unit franchisees without a focus on hospitality may struggle to gain longstanding momentum, but may strive for significant growth in the future.
Transformation comes from culture
There are certain franchise concepts that produce franchisees with the skills and tools to succeed at any franchise concept they undertake in the future. Specific brands are able to build multi-unit operators and teams that execute extraordinarily well, and once they head to another concept they excel because of the culture they brought along with them. As a multi-unit franchisee looking for growth opportunities, be sure to analyze the training you’ve already received, and find ways to bring transformative qualities of your own background with you into new concepts.
Focus on your people
Arguably the most important piece of growth and transformation as a franchisee with multi-unit experience and aspirations is to focus on the people you’re putting into your investment. For franchisees that have been in the business, opening and owning a franchise is like raising a child. If you invest time and patience into its development during the formative years, when it’s grown, you’ll be able to be proud of its success and see the fruits of that energy. It takes a lot of time, energy and resources to own a franchise, let alone multiple units or brands, and that output is only multiplied as you set your sights on growing or transforming your footprint. Above all, keeping a keen eye on your people, coaching and building them to be successful will be the key to delivering a great guest experience everyday.
Ed Yancey, director of franchising for B.GOOD, brings more than 20 years of franchising experience to B.GOOD. B.GOOD is a Boston-based sustainably-sourced farm-to-table sensation.