Attracting the Untapped Multi-Unit Operator

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Grow your brand with exemplary owners throughout 2017.

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By John Erich

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There are two distinct categories of operators in the world of franchising: single-unit owners and multi-unit owners. Single-unit franchising is the typical route entrepreneurs take, usually investing in one unit with no promise of opening additional locations. The common story: a husband and wife duo leaving corporate America to take a stab at running their own business.

However, with the prosperity of the franchise industry in the past years and its positive outlook for the years to come, single-unit ownership is no longer the end of the story. The multi-unit franchisee is an idea that has increased in popularity and frequency in franchising, and looks to be a trend that will continue moving forward. As the industry prepares for expansion, franchisors need to capitalize on all avenues to grow their franchise. One of these avenues often overlooked is the value of the multi-unit owner. How do you attract them?

Franchise expos provide the perfect platform to encourage single-unit owners to expand their business and give franchisors the opportunity to discover new, prospective area developers and multi-unit-minded entrepreneurs. They provide a forum for one of the most comprehensive learning experiences about the franchise model. From free seminars to in-depth workshops, expos are designed for franchisees to take a deeper look at the opportunity of multi-unit ownership. The upcoming International Franchise Expo June 15-17 at the Javits Center in New York plans to address topics of multi-unit ownership such as the economic value, higher revenues and lower costs, the dynamics of the relationship with the franchisor, vendors, and employees, and much more – all to energize entrepreneurial expansion. Additionally, of last year’s IFE attendees, more than 63 percent already owned a business, providing abundant opportunities to attract new multi-unit operators to your franchise system.

Growing from Within

All franchisors know how difficult it is to attract highly coveted franchisees to invest in a new business concept. Instead of focusing solely on bringing in new franchisees to grow your brand, franchisors benefit from turning successful single-unit franchisees into multi-unit franchisees. Focusing on the talent that exists within your system ends up being a win-win situation.

From the franchisor standpoint, it’s much easier to convince someone who has already made an investment in the business to invest even more. The entrepreneur already saw something unique and noteworthy about the business that caught his eye, and it’s an easier conversation to re-ignite that flame rather than to discover it elsewhere. In the eyes of franchisees, multi-unit ownership provides more stability and a higher expected rate of success, as they are not reliant on just one location to be successful. However, there is a greater risk involved, so take the time to properly communicate the opportunity.

Communicating Multi-Unit to Current Franchisees

A different approach is needed for conversations with current franchisees potentially purchasing more units compared to new franchisees. Entrepreneurs who have already bought into the franchise, believe in the product or service and know it would be successful in their area. Now, you need to convince them that purchasing another unit is the next logical step to building their business sphere.

If the single-unit is doing well in the area, the numbers will speak for themselves. Articulate to entrepreneurs that you are confident they have the skillset required to manage multiple units and you want to capitalize on their strengths.

In addition to this, realize that for many entrepreneurs, more than just pure profitability is required to convince them to invest further into a company. When discussing possible multi-unit ownership to a single-unit franchisee, focus on other ways the company will help outside of simply generating revenue. These types of conversations should highlight the support you can provide from the home office, how the brand is benefiting the area where it is currently located, and how surrounding areas are showing a similar demand as well. If your company is environmentally friendly, gives back to the local community, or facilitates a system-wide fundraiser, be sure franchisees are completely aware of all the good your company does and how it affects the area they serve.

How One Single-Unit Owner Became a Multi-Unit Franchisee

Consider Mihir Paranjape, a Painting with a Twist franchisee in Evansville, Ind. He was introduced to the paint-and-sip concept while vacationing in Tampa when his family took refuge in one of its studios during a massive tropical storm. He instantly fell in love with the unique concept and knew his town needed a stress-relieving outlet. In 2014, he opened Painting with a Twist of Evansville.

As he became more familiar with the brand, Paranjape appreciated how much it gave back to the community, both locally through Painting with a Purpose events, where all proceeds go to a local charity, and nationally through larger system-wide initiatives such as their partnership with the Vera Bradley Foundation.

Paranjape made the easy decision to bring this concept to the neighboring town of Owensboro, Ky. the following year, knowing it would benefit the local community. Now, he’s set to open his third unit in the area this year.

If it wasn’t for Painting with a Twist’s incredible dedication to giving back to the community both locally and nationally and building relationships beyond just a business, Paranjape would not have looked to expand his franchise into surrounding areas. He debated opening a cheaper, quicker-to-launch franchise in the surrounding areas to diversify his investments, but ultimately it was the franchise’s devotion to something greater that sold him on further investing in the company.

This is a prime example of how a company is creating an environment that is appealing to entrepreneurs owning multiple units, as it benefits the local areas in which they operate.

Communicating Multi-Unit to Others

Franchisors aspire to sell multi-unit deals with entrepreneurs right off the bat, and in order to do that, strategy and planning are required. Multi-unit prospects will avoid any business concept that appears to remain stagnant, so it’s crucial to articulate how you are evolving alongside the changing environment.

Showcase business innovation and dedication to the success of the company. By highlighting creative new ideas within the company, prospective franchisees will be convinced your business is able to stay on top of the competition, so a larger investment will go further.

Additionally, investors conduct their own research and analysis of the brand on the internet, so it’s important to have a strong online presence in order to attract the right kind of investors. Most importantly, connect with the prospective franchisee on a personal level, as great relationships will be more convincing than numbers for entrepreneurs debating purchasing multiple units.

Take advantage of industry events such as franchise expos which provide the perfect platform to meet franchisees face-to-face, and discuss your brand in-person. Mark your calendars for the 2017 International Franchise Expo, June 15-17 at the Javits Center in New York City. Visit www.IFEinfo.com for more information.

Ultimately, both single- and multi-unit operators have their place in franchising. However, as franchising continues to expand across the United States and in other nations around the world, franchisors must put their efforts into discovering the multi-unit-minded entrepreneur and converting successful single-unit franchisees into multi-unit operators; a tactic often forgotten in growth plans. Multi-unit franchisees are taking off and expect others to get on board.

John Erich is Director of Marketing for MFV Expositions. His experience includes working for companies such as the Craft & Hobby Association and George Little Management.