Avoiding the Sinkholes
Sage advice for potential franchisees considering multi-unit expansion.
By Adam Saxton
As more companies look to franchising to grow quicker and smarter, emerging entrepreneurs continue to explore restaurant ownership as a lucrative business option. The franchisor/franchisee relationship is unique and allows companies to expand rapidly, while giving entrepreneurs the chance to fulfill a lifelong dream of owning their own business. Multi-unit operators have become the prized jewels to franchisors, as we help lower the number of people a company must train to maintain consistency and can assist with accelerated expansion.
In turn, multi-unit owners are given a business model that allows us to not only open franchises with a proven structure and framework, but also utilize the company’s nationally recognized name to assist with our supply chain needs.
However, owning and managing multiple units is no walk in the park, as it’s just too easy for operators to lose focus, try to do everything themselves and run into unexpected troubles. Many believe this is the industry for them, then in the process of becoming a multi-unit owner, they uncover unexpected pitfalls that can make or break their franchising business.
The Saxton Group owns 80 McAlister’s Deli restaurants as part of FOCUS Brands. Our family-owned business has seen it all and we’ve been through the ups and downs. We’ve uncovered a variety of habits and factors to consider to ensure our business continues to grow in smart and fruitful ways. Multi-unit ownership can present its challenges, but for smart operators, the risk is always worth the reward. Dodge a few traps and you can thrive.
"For smart operators, the risk is always worth the reward."
Never compromise on real estate
The urge and curiosity to instantly expand is a common feeling. But when is the right time? There are several factors that should influence that question, with one being real estate availability. You can’t manufacture a great site, regardless of your will to grow. The right real estate opportunity either exists or it doesn’t. All franchisees struggle at some point in their careers with finding the ideal site within the markets or territories they’ve chosen. As a franchisee, one of the worst things you can do is feel pressured to make a long-term real estate decision on a short-term opportunity that you know wouldn’t be as successful. Smart franchisors know this too and provide the time and resources necessary for a franchisee to identify the right location. It all goes back to being patient. If what you’re looking for isn’t available, wait until a more fitting option comes on the market.
"The right real estate opportunity either exists or it doesn't."
Build a self-sustaining team
As the first location opens and you get the itch to expand, it’s important to evaluate how well your team is working and ask yourself if they are at the level where you can begin handing off responsibilities. To ensure a successful run, owners should invest in training their team before moving on to the next project. These early employees are your foundation and you’ll pull talent from this base as you continue to grow. Another great piece of advice is to promote from within. We’ve built a culture where 100 percent of our promotions come from within. This encourages employees to want to continue growing within the company, and results in greater stability and consistency. Show employees a clear opportunity path and they’ll form the team that will make your business strong.
Evolve with the times
How did our family-run business go from one McAlister’s in 1999 to 80 today? There’s no simple answer, but evolving with the times played a big part. Franchisees who love and are passionate about a brand are also often hesitant to see it change. Resist that hesitation and embrace your brand’s need to continually evolve. Over the years, McAlister’s Deli has emerged as a strong brand with a large following due in part to investments and decisions that have been made to push the brand forward. Online ordering, a loyalty app, new menu items, fresher and healthier ingredients and specific offerings for kids and families are just a few examples of incremental evolutions that have made a greater impact on how we do business. FOCUS Brands has also helped us stay in touch with the consumer insights needed to help us deliver the customer experience of today while anticipating the needs of our customers in the future.
"Resist that hesitation and embrace your brand's need to continually evolve."
When multi-unit owners don’t pay attention to growing trends or keep up with industry technological advancements, units eventually start to see a detrimental loss in revenue. For starters, a consumer-friendly website can make all the difference. Everything is done online today and by providing easy and quick access to information, the Internet has transformed the way franchises communicate with their customers. An unattractive website will push business away.
Don’t get distracted
The shiny new objects and overly qualified compliments will all come soon enough, but don’t get distracted by them. It’s easy for multi-unit franchisees to get sidetracked by all the noise surrounding their business and openings. In fact, it happens to most of us, but one of the best lessons learned in franchising is to keep your head down and focus on why you’ve decided to become a multi-unit owner.
There’s no denying that becoming a multi-unit franchisee takes a lot of dedication, strategy, time and investment – both personal and financial. However, the reward is much greater and even when the times get tough, focusing on what’s important will eventually lead business owners to a profitable outcome.
Adam Saxton is co-CEO and owner of the Saxton Group and President of the McAlister’s Deli Franchise Advisory Council. Saxton, his father Kelly and brother Matt are one of the largest restaurant franchisees in the U.S. with 80 McAlister’s Deli locations across six states. Learn more at franchise.org/mcalisters-deli-franchise.