Single Unit vs. Multi-Unit Franchising

So, you’ve decided you’re going to open a franchise. While your mind may be filled to the brim with different questions and concerns, one of the most important decisions you’ll make when opening a franchise is whether to open a single unit or multi-unit franchise. Both options have their pros and cons. The answer to this question depends entirely on your knowledge and goals as a business owner.

 

What is Single Unit Franchising?

If you’re looking to open your first franchise, single-unit franchising might be the best choice for you. Essentially, single-unit franchising is when the franchisee is permitted to own one location.  Whether this is your first entrepreneurial investment or you’re only running your franchise part-time, people who chose to own a single-unit franchise typically operate the business themselves.

 

The Benefits of Single Unit Franchising

Of course, a single-unit franchise is more common due to the lower upfront cost of the investment. The great thing about running one franchise location is that the owner only needs to keep track of the overhead expenses of one business. Since owners work at their franchise locations, they’re able to garner an in-depth understanding of every area of their business.  In addition, they can easily watch over their employees to ensure that their customers are being provided with the best customer service and high-quality products.

 

What is a Multi-Unit Franchise?

While a single unit franchise owner is only responsible for one franchise location, a multi-unit franchise owner has more than one unit operating under an Area Developer Agreement. An Area Developer Agreement is when a franchise owner has been permitted the franchisor to own multiple units in a specific area. People who have chosen to invest in a multi-unit franchise are experienced business owners who can make a higher investment upfront. 

 

Benefits of Multi-Unit Franchising

If you’re the owner of a multi-unit franchise, your focus will be on the big picture, not the day-to-day operation of the franchise. This means you’ll constantly be observing the overall growth of your franchise. While the investment of a multi-unit franchise is significantly steeper than it would be with a single-unit franchise, you are more likely to be successful. If you’re in charge of more than one franchise unit, and you can calculate your business choices wisely, your profits will skyrocket. Many franchisors offer a discount to those looking to open a multi-unit franchise for this reason.

Provided that you are strategic in your choices to maximize your profit, you’ll have more money to funnel back into your franchise for things like better employee benefits, advertising, and supplies.

 

Hundred Acre Consulting

If you still feel overwhelmed and unsure about whether you should invest in a multi-unit or single-unit franchise, consider hiring a franchise consultant to help you make the most profitable decision. At Hundred Acre Consulting, we are partnered with over 500 franchises in a variety of different industries. We bring people’s dreams to life using our business knowledge and connections to ensure that you invest in the most lucrative franchise possible.

If you’re ready to work with a franchise consultant, contact me today, and let’s get started!

 

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