Do Emerging Brands Have a Fighting Chance at Attracting High Performing Multi-Unit Operators?

Today’s successful multi-unit franchisees have all experienced and profited from successful franchise investments and franchisor relationships. They know the value of multi-unit ownership, they understand the significance of scalability, they require measurable ROI, and they know what a winning culture and franchisor leadership team looks like. 

If you’re an emerging brand, do you have a shot at attracting these high performers?

To start, larger franchise systems have a metrics and data advantage over you. They have more franchise operators, longer track record, validation, and Item 19 data sets that, if favorable, provide data that multi-unit operators are more confident in relying on. Your Item 19 may look great, but how scalable has your system been proven? 

If you’re looking to attract successful multi-unit operators, you need to be genuine about your goals and the advantages you provide. Some factors to consider:

• Unit Level Economics – Does your business model afford more reliable unit level economics that multi-unit operators can rely on? We’re not just talking about traditional Item 19 data, but KPI’s and unique attributes about your business model that are more reliable and repeatable. For example, is your business based on a “big box” retail experience that fills a unique space in the marketplace and produces repeatable revenues and unit economics that a multi-unit franchisee would be comfortable relying on?
• Management Team Execution and Vision – Have you invested in building your leadership, support, and coaching team specifically for multi-unit franchisees? Individual unit franchisees and multi-unit franchisees are two different categories of franchise buyers. You won’t attract winning multi-unit franchisees without building the team and tools to support them.

Too many emerging brands sell multi-unit franchises to the wrong franchisees. Others waste capital marketing to multi-unit franchisees when they are just not ready. For most emerging franchise brands, the best strategy for attracting multi-unit operators is to build them from within. Support and coach your franchisees into successful multi-unit ownership. If you do that, you’ll win!

Bottom Thoughts

The aha moment many franchisors have is the aha moment when they discover that multi-unit franchisees are easier to work with, grow with, and sell with. 

“By gosh, I got it,” said the Franchisor. “We will only market to multi-unit franchisees – the biggest, the brightest, the best. And they will come in droves. They will desire our brand and grow with it. We will take over the franchise world, (dark laugh) ha, ha, ha, ha.”

Then the tires screech, as they pull up to the franchise parking lot full of others who have figured out their aha moment.

“What are all these franchisors doing in this franchise marketing and sales parking lot,” the Franchisor screams. “How did they figure out our secret plan?”

Well, unfortunately, and unfortunately again – franchisors have been going after this elusive group for quite some time. Area Developers, master franchisees (can we just retire that name), multi-unit owners – the name of the game/target has changed, yet the actions have stayed on course.

So, here’s the thing. You are absolutely not wrong to want a multi-unit franchisee – especially one who came from another brand, has built up wealth, understands franchising, etc. But where you will be challenged is there is no magic to the sales process – they are hard to move. And then, the biggest challenge is the amount of franchisors who are marketing to this exact same target – there are hundreds of them (just look at the multi-unit conference).

Thus, just like anything else, you need something to snag their attention when they are ready to diversify their portfolios. You need to stand out. You need to differentiate your offering.

This is likely when the, “there is no way I can do that” comes into play. Royalty relief, marketing support, turnkey development – things that drive cash back to the buyer…now the ears listen.

So, when you pull up to the park full of franchisors looking to sell to franchisees, remember that this is still a big investment, still comes with risk, still has challenges – and then after all of that, you have to really showcase a clear why you/why now.