Many franchisors are starting to move toward only accepting franchisees who agree to open multiple units instead of having a large pool of single unit franchisees. Did you know that multi-unit franchisees own 53 percent of the 450,000 franchise units in the U.S., according to FranData. This strategy offers the franchisor a lot of benefits, but also to the franchisees as well.
Learn what is a multi-unit franchise and why it’s a smart investment:
First, it is important to understand what multi-unit versus single-unit means. A multi-unit franchise is when a franchisee purchased the rights to develop and multiple units in a particular territory. When you own multiple units, you are less likely to be involved in the day to day operations of a single unit. You will instead be focused on the overall management of all of your units. You will need to have general managers and staff you can trust at each of your units to make sure they are successful.
And as a multi-unit franchisee, you will sign an area developer agreement, which outline the number of units that you agree to open and in what time period and in what specific territory you will do so. Typically your territory is protected from encroachment unless you don’t fulfill all your agreements. If you don’t stick to the schedule laid out in the agreement, you could be at risk of losing your rights to open any more locations under the agreement.
A single-unit franchise means that you entered into an agreement with a franchisor for just one franchise unit and no expectations for later expansion into multiple units. Many single-unit franchise units are owned by people interested in owning their own business, but are not looking for or don’t have the capital for a larger enterprise.
With single-unit franchises, the franchisee is usually the main operator of the unit who runs the day to day operations. With a single-unit franchise, there is only a single franchise agreement between the franchisor and the franchisee.
Now keep in mind that entering into a multiple unit contract is going to mean more money from you upfront. Whatever you would pay for one unit just multiple it by the number of units you are interested in owning.
For example, if each franchise unit is $175,000 and you want to own 5 of them, you will need to make a $875,000 investment. And then you will have to factor in the ongoing costs for each franchise unit you own like payroll costs, rent, and inventory.
Why Is It a Smarter Investment?
For the franchisor, selling a multi-unit franchise means better financial security because small operators of one or two units tend to struggle more in economically tough times. Also multi-unit franchisees tend to be more experienced at running a business and already have strong relationships with realtors and vendors making it easier to rapidly expand the franchise.
For the franchisee there are a lot of benefits in this type of franchising opportunity as well:
Lowers Your Overhead Expenses Per Unit
While the initial startups costs will be higher for multi-units, once your units are established, you will be able to lower your overhead expenses per unit because you will have some fixed costs that will be shared across all locations. For example, if all your locations will share the same vendors, then you will be able to negotiate better deals for goods and services.
Offers You Better Stability
I am certain you have heard the horror stories of new franchise businesses folding in the first year. That is a big fear for new franchise owners, but it doesn’t have to come to fruition if you plan right. And part of your plan is to start with multiple units right from the get go thus improving your chances of success. Each of your units can help buoy each other up if lean times hit.
It Is Not As Expensive As You Might Think
While you will have to spend more money at first, it might not put you in the hole as much as you might think. Franchiser owners often offer discounts and incentives to their franchisees if they purchase multi units. If you know you want to eventually expand anyway it might make sense to buy them now at a lower cost.
Helps You Establish A Stronger Brand
The franchisor will be providing you with some marketing and advertising messaging to help attract customers, but the great thing about owning multi units is that you can establish your brand within the larger brand, but showing the customers what makes your multiple units stand out from the rest. And because you will want the same central message across all three units, you will be able cut down on the money spent of advertising and marketing.
Will Help You Establish Stronger Relationships
Another benefit of owning more units is that you will develop more contacts in the franchise world and with vendors and real estate agents.
Why Choose Zac’s Burgers for Your Multi-Unit Franchise?
Zac’s Burgers is growing by leaps and bounds and their brand recognition is spreading earning them larger numbers of loyal customers. Zac’s is looking to expand their family by welcoming new franchisees.
The best thing about choosing Zac’s Burgers as your fast food franchise to invest in is that there are so many different options available depending on what you look for. You can choose between either a brick and mortar Zac’s Burgers franchise unit or franchising a Zac’s Burger Bus.
Zac’s Burgers is particularly looking for multi-unit franchisees. A family-owned burger franchise like Zac’s who offers quality food and warm hospitality is always a smart investment.
Even with more attention being paid to healthier living, there will always be a need for fast food. We all crave that burger and fries at some point, whether it is for a family treat on a Friday night or for a quick lunch during the work week. And Zac’s offers their own twists on favorite recipes that will keep people comoing back for more. This is an area that will never be oversaturated.
Also Zac’s offers you an affordable, accessible food opportunity. Their franchise fees are reasonable and so are the prices they offer their customers. Zac’s can help you make your dream of being a successful business owner come true.
For more information on Zac’s Burgers franchise programs, give them a call today or visit their website.