As summer heats up, multi-unit and multi-brand franchising remains a hot topic in our industry. In fact, in 2022, multi-unit franchisees owned 53.9% of the total franchise units. And it’s no secret that with more than 30 brands and 5,000 franchise owners, Neighborly’s status as the largest home services franchise brings ample opportunities for growth across the network.
Back in April, I attended the Multi-Unit Franchising Conference, where I had the chance to connect with existing franchise owners looking to diversify their portfolios and celebrate as Shiran Kanji,
Interested in multi-unit franchising? Here’s what you need to know about becoming a multi-unit or multi-brand franchise owner…
If You’re Not Growing, You’re Behind The Curve
Multi-unit and multi-brand ownership differs from other forms of ownership by their overall goals and objectives – they want to maximize many businesses across a territory as opposed to only focusing on one single location. As a result, these franchise owners are driven to grow exponentially faster than single-location owners.
Multi-unit franchising provides extensive growth opportunities to expand as a business owner. Opening new locations of the same brand offers the benefit of a deep understanding of how that business works. Multi-brand franchising helps create diversity of business income streams to offset uncertainty in the economy and gives you the ability to take advantage of economies of scale across brands and locations.
However, both business models can run the risk of spreading resources “too thin” and can negatively impact the existing business lines. When deciding if becoming a multi-unit or multi-brand owner is right for you, you need to ask yourself: will the additional locations and/or brands take away from the existing success of my business? Are there economies of scale that can be taken advantage of, or will there be some additional start up costs?
The business model and industry you would enter when venturing into multi-brand ownership is another important consideration. For example, home services franchises are often appealing prospects because many do not require brick and mortar stores. Traditional multi-unit owners have often been owners of restaurants, hotels, gyms, and so on – all of which require real estate. Since some of Neighborly’s brands do not, our cost structure is more attractive and the economies of scale that can be recognized is very unique.
Multi-unit franchising can provide a multitude of benefits, but you need to balance the risks and rewards to decide if it’s a path worth taking.
Grow as You Go
After considering if multi-unit franchising is right for you and your business, the next step is to review territories to ensure it is attractive for additional business for an existing brand. Due diligence on brands that can either complement existing franchise brands or provide a unique diversification and hedging of risk of existing operations can help you find the right business to expand into.
The biggest change as you begin expanding your portfolio is implementing a management structure that can accommodate the additional complexities of multiple brands or locations. Building out additional management processes can help ensure operations continue to run smoothly in existing locations as well as newer locations.
When owners within our network look to expand, Neighborly provides the necessary support to make the process as seamless and successful as possible. It starts with exceptional operations support from dedicated franchise business coaches that advise owners on when is a good time to expand their business. Leadership at the brand level then provides guidance to owners on what criteria is required to expand into other franchise brands for those becoming multi-brand owners. And of course, validation from other multi-unit and multi-brand owners provides a great perspective for prospective multi-unit owners.
Multi-unit franchising provides many benefits and challenges, and it’s not a decision that should be made lightly. It’s important to understand what that expansion entails to decide if it’s best for you and your business. But if you decide to become a multi-unit or multi-brand owner, Neighborly is here to help you along the process.
Written By Brian Woods, Group VP, Franchise Development, Neighborly on LinkedIn
