A Flexible Model
Choosing the right approach to multi-unit for your franchise system.
By Shannon Hudson
There is a common myth that franchise expansion is best achieved by awarding as many multi-unit agreements as possible from day one. However, if multi-unit development agreements are awarded without the proper systems in place to support such lofty development goals, you run the risk of not just one franchise location failing due to ineffective ownership – possibly many. In the long run, it is far better for a franchisee to run one outstanding location first as opposed to multiple lackluster ones. Therefore, the approaches to multi-unit franchising taken by a brand can vary.
As 9Round has grown to more than 770 locations in just 10 years, our franchise systems have evolved, presenting a need for variations in our approaches to multi-unit franchising. Over the years we have perfected our franchise model to become more scalable, which shifted our approach from gradual multi-unit franchising that requires full-time owner-operators to begin with a single location before eventual expansion, to immediate multi-unit development led by experienced franchisees who take on more of a semi-absentee owner role from the start.
Based on the evolution of 9Round’s franchising practices, here are the ways both the gradual and immediate approaches to multi-unit franchising, although very different from one another, can benefit your franchise, and why their success is so dependent on your franchising model.
When you are deciding whether to welcome a franchisee who intends to own multiple locations, it is especially important that the person is the right fit for your system. In our first 10 years of business, when finding the appropriate ambassadors to serve as 9Round’s franchisees, it was useful to require franchisees to succeed with just one location as full-time owner-operators before being awarded more units over time. A majority of the 40 percent of 9Round owners who are multi-unit operators today began according to this approach.
Having a calculated method to allow our franchisees into multi-unit ownership proved incredibly beneficial for 9Round in the long run by building confidence between us, the franchisor, and the franchisee prior to expansion into multiple franchise locations. When successful ownership of a single location is achieved, then the likelihood of the franchisee finding success with more locations increases.
Not only is the franchisee comfortable with the model already through training and hands-on experience, but the franchisor can expect less of a risk as this successful franchisee opens more locations moving forward.
Adapting With Semi-Absent
As 9Round’s franchise model has evolved, there have been opportunities for the brand to consider offering a new franchise model that could function under semi-absentee ownership. In our system, the recent availability of this updated model has opened the doors for franchisees interested in taking on more of a “manage-the-manager” role than a full-time operational role.
This model appeals to a wide variety of potential franchisees ranging from investors looking to franchise with multiple brands to those looking to maintain their current careers while opening a 9Round franchise on the side. It is especially attractive to those interested in multi-unit franchising.
Semi-absentee ownership is ideal for individuals with extensive management and/or franchising experience. When someone has the capabilities and resources to take on simultaneous development of multiple locations, rapid growth escalates. And when the franchise has support systems in place to help that experienced multi-unit developer successfully manage all locations once they are up and running, sustainability follows. If your goals are both continued growth as well as brand longevity, then you must remember that you as the franchisor need to provide opportunities for achieving such goals.
Training and Support
Changes in 9Round’s approach to multi-unit franchising is occurring as a result of the brand’s maturing systems. So what does “having the right systems in place” really mean for multi-unit franchising? Your franchise system must be conducive to the potential multi-unit franchisee’s growth aspirations.
This begins first and foremost with the provision of ongoing support resources from the franchisor. In 9Round’s case, those resources included extensive online employee training modules, regional training, constant communication from franchise success coaches, email communication and newsletters, yearly conventions, and more.
It is necessary for your franchise to be scalable so that it can operate successfully under eventual semi-absentee ownership as it is physically impossible for a multi-unit franchisee to be present and directly overseeing the work of all his/her locations at once.
The Right Fit
The approaches to multi-unit franchising vary depending on what best fits your franchise model. By awarding multi-unit agreements thoughtfully through thorough vetting of candidates, maintaining a focus on providing growth opportunities for all franchisees and giving these owners a turn-key system that they can successfully operate from a “big picture” role, then multi-unit franchising shows promise for positively impacting your network over time, regardless of how you reach that point.
Shannon Hudson is the Founder of 9Round Franchising Inc., which offers a 30-minute full body kickboxing program. Learn more here.