Building a Legacy through Multi-Unit Franchise Ownership

Multi-unit franchise ownership creates growth and legacy building opportunities for franchisors and franchisees. Franchisees benefit from the business and income building opportunities created by multi-unit ownership and franchisors benefit from better performing business oriented franchisees focused on growth and committed to building organizations.

Of course, these benefits all depend on execution, selecting the right franchisor and selecting the right franchisees. There are many variables to getting this right, and below are some that we know can help franchisors and franchisees create legacy building multi-unit franchise opportunities:

• Build Your Bench – For good reason franchisors are focused on attracting the current generation of proven multi-unit franchisee winners or, at least, an older generation of well capitalized corporate refugees with aspirations of multi-unit ownership. That’s great, but don’t overlook the next generation of 35 and under franchisee candidates that may be starting off small but that can be coached into high performing franchisees and the future stars of your system.
• Don’t Hunt for Whales – If you are an emerging brand, attending multi-unit conferences and spending money chasing and attempting to attract established multi-unit franchisees is not the best use of your time and capital. Focus on building your bench.
• Build a Science Around your Economics – Starting with your Item 19 financial performance representation, multi-unit franchisees and smart farm system bench building franchisees need to see a proven science of your franchise economics. Start-up costs, positive ROI, and unit level economics that demonstrate profitability, and potential business and organization building opportunities around multi-unit ownership.
• Coach Your Franchisees – Every franchisee should be on-boarded with an expectation of beginning with the end in mind. What success can look like in years 1, 2, 3, and 4, and how to achieve multi-unit ownership that requires a commitment to building capital reserves to fuel long-term growth.

Most multi-unit development agreements never achieve their development goals. Think of the lost opportunity. It doesn’t have to be this way!

Bottom Thoughts

Short term mindset? Buckle up and be boutique FOREVER.

So many founders have this special business disease called Founders Syndrome – a very contagious disease that prevents growth because it’s all about saving money versus thinking long term.

This awful disease causes leaders to keep their wallets tight, not spend, take short cuts on people and processes, and ultimately have big dreams that find a very sad graveyard.

Unfortunately, many founders have this disease. They get stuck in lifestyles or false expectations. The amazing thing is that they spend tons of money over the course of time, but keep the bursts so small that they never gain momentum. They are constantly disappointed and sacrifice winning in exchange for savings and short term gain. They claim to be all about culture, growth, and people – yet the actions tell a much different story. They are 100 percent entrepreneurs, but they are not business-minded. They constantly think they are the smartest person in the room, but oftentimes, the smartest person in the room (likely in ops) simply brushes them off as irreverent.

Know someone who has this disease? Know someone who has these side effects? You can coach them, guide them, and lead them toward a pathway of larger riches and bigger picture thinking – but, you better buckle up for a large fight, because the founder always knows best. Until, wait for it, they hit the bottom.

And oftentimes, at the bottom, they see a glimpse of what could be. They have this entrepreneurial guardian angel visit and say, “yo, invest now – make riches later”. And then, a small fraction of founders turn things around and make big moves. And those big moves gain them the exits or investments they desire.

It’s not hard to grow a business, it is hard to nail the fundamentals.