A person’s journey through franchise ownership can take many different paths. In fact freedom and flexibility are two of the primary perks of the franchise industry. Regardless, it is fair to say that most franchise owners get into franchising to build a business, not to buy a job. As such, it is common for franchisees to become multi-unit owners within their first 5 years as business owners.
More than half of all franchisees in the U.S. own more than one location. That’s because most franchise owners want to build something they can work on, not in. This typically evolves to the point where franchise owners are able to step back and have managers run the business, allowing them to make income without much time or energy invested.
The First 5 Years of Franchise Ownership
Year 1 (Infancy)
There is a lot happening during your first year of franchise ownership. You’re learning the business, finding customers, building your team, and hiring employees. There will be turnover, and you will make mistakes. That’s normal. It takes time to build.
Learn more about “What to Expect in Your First Year as a Franchisee”.
Year 2 (Adolescence)
In your second year, you become more knowledgeable about the business. Your brand is building, you have a solid team of employees, and you have repeat business. This is the time when you refine business operations and processes. You have your feet under you now.
Year 3 (Adulthood)
This is the time when most franchise owners start maturing. You understand the more nuanced aspects of the business like the financials, lifecycle, seasonality, and what personality types work well within your team.
You are also more financially stable now. It is around this time that many franchise owners begin to grow their businesses and open additional locations.
Year 4 (Parenthood)
Here there is more focus on growing the business. Many people start with one franchise, then open a second and third location. In doing so, they create a formula for success that is easily replicated across business locations. We call this “rinse and repeat.”
As you expand your business, many multi-franchise owners are able to share staff, managers, resources, etc. across locations. Growing your business also brings increased stability and the ability to multiply your income through added locations.
Year 5 (Semi-Retirement)
By this point, many franchise owners begin to step back and start enjoying life. Some people travel more, some enter a form of semi-retirement. Some may choose to sell their business. Others continue to build their brand and even start a new franchise in a different industry. It depends on what your goals are, and the choice is entirely up to you.
To learn more about franchise evolution, pick up a copy of The Educated Franchisee by Rick Bisio and Mike Kohler, which talks about the different stages of franchise ownership.
Multi-Unit Franchise Ownership
Over the past decade, multi-unit franchise ownership has significantly increased. Today, there are more than 43,000 multi-unit operators in the U.S. who control approximately 54 percent of all franchise locations in the country.
Some people open multiple locations within a single brand, while others branch out to become, multi-unit, multi-brand operators. This provides business owners with a diverse portfolio of franchised locations and a wider network of resources to draw from.
There are considerable benefits to owning multiple franchise locations, such as:
- Improved efficiency: You learn from previous experience. This accelerates growth and enables you to be more profitable more quickly.
- Increased earnings potential: Multi-unit franchise owners can take advantage of economies of scale, lowering costs and increasing earnings.
- Reduced risk: You are less dependent on a single location or a single market. It also diversifies streams of income.
Multi-unit owners are also good for the franchisors. It costs significantly more money to identify, sign, train, and support individual franchisees compared to supporting an established multi-unit owner.
Some people just buy one business, and that’s perfectly fine! Single-unit owners are not going away. This is the core of franchising.
You can be a single-unit owner, a multi-unit owner, an owner-operator, an executive franchisee, or somewhere in between. There are many possible paths. It all depends on your lifestyle, your goals, and how involved you want to be in the day-to-day operations of the business.
That’s the beauty of franchising.
Whatever your goals are, the franchisor will help you determine the steps and the KPIs to help you make your dream a reality.
Watch these videos for insight directly from franchisees who have gone through the process and established themselves as successful business owners.
Whether you are a prospective franchise owner opening your first location, or an experienced franchisee seeking to expand your business, I am here to help! Reach out and we can discuss the opportunities that best suit your goals.
Start your journey today and make the first five years of franchise ownership an extraordinary chapter in your entrepreneurial story!
