Running Multi-Unit Franchises

By Deborah Sweeney, CEO of MyCorporation

According to FRANdata, 52 percent of all franchises are now multi-unit operations. With the biggest industry being fast food at 35 percent, restaurant, beauty and bakery categories come in next, each making up 28 percent of all multi-unit franchises. That’s a good chunk of franchise entrepreneurs making the jump from single locations to multi units! Of course, there’s a huge difference in owning a single location versus owning multiple units. Here’s what you need to know about running multi-unit franchises:

Don’t forget to file your franchise.

A lot of franchise owners (of single and multiple units) often depend too heavily on the head office to provide them support. When you utilize a filing service, you’re getting an extra level of support. A filing service will assist you with the legal side of running multiple franchise locations. Additionally, lots of franchisors like to form a separate business entity and run their company through that. When you’re running a franchise (especially multiple locations) there’s always the chance that things won’t work out. When you file your business, you’re putting up a wall between any money your businesses owe and your personal assets.

Take into consideration the cost of doubling your locations.

Remember when you opened your first franchise and you had to pay for the franchise fee, marketing, insurance, leasehold improvements, rent, utility deposits, equipment, inventory, working capital, training and travel? A lot of that comes back for round two. Remember that just because you ran one location successfully, each franchise is different. You need to take a lot into consideration: where the new location is, if your target demographic is as accessible in the new location, what other businesses surround the new location, etc. Running your first successful franchise is an awesome head start at running a second successful franchise, but know that each experience will be different. If you started making a profit within the first year in your first location, your second could take two years.

Remember everything you learned the first time.

Though you can count on some things to be different this time, the good news is you can count on a lot to be the same, too. Training and hiring will be much easier this time around. You can read a million books on hiring and training new employees, but nothing is a teacher quite like experience. This time around, you’ll know where exactly to post “help wanted” and how to efficiently train a team all at once. Additionally, you’ll gain some credit from the franchisor. The more units you open, the more revenue you collect, and the more important you become to the franchise.

Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @mycorporation.

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