Johnny Franchise: The Franchise Expert

Developing the Multi-Unit Franchisee Mindset

Written by John Francis | Jul 26, 2016 12:47:09 AM

For many franchisees, the definition of success isn’t simply to grow a thriving single unit business:  it’s to grow and expand into additional units, as well. And while it may seem like a natural progression for many franchise owners, it does require a mindset shift in order to execute successfully. It’s a topic I’m excited to share with the Painting With a Twist team at their annual conference later this month. This will be my second time attending the event, and I’m once again looking forward to sharing in their enthusiasm and growth.

The Importance of Delegation

One of the first steps in preparing for multi-unit growth is developing a multi-unit mindset. So, rather than participating in all the day-to-day activities of running your unit business, it’s your job to hire a good staff with solid shift leaders and managers who you can trust to follow the systems and keep everything running smoothly. By hiring managers that behave like owners, you’ll have the time to focus your energy elsewhere: such as securing and growing additional units, and developing new opportunities for your team.

Weekly meetings with focused accountability, along with a reliable reporting system, will help you stay connected and aware of the performance of each unit. This will allow you to manage your operations and people most effectively and pick up on potential issues quickly – before they become a major problem.

Taking Advantage of the Cluster Effect

When I was a multi-unit franchisee, I made the mistake of having my stores 30 minutes apart. While that may not seem like a far distance, the time sure adds up when you’re bouncing between stores each day. I was spending more time in my car than running my stores!

To prevent this problem and increase your efficiencies, I recommend keeping stores within a 15-minute drive of one another. In addition to saving you time, keeping your stores close together has another important benefit:  it makes a bigger impact on the market area. This allows you to share advertising costs, branding efforts, shared inventory, staff and other resources.

Prepare for Incremental Growth

When it’s time to grow your franchise business, it’s important to do so gradually…you don’t want to go from one to five stores overnight! This incremental growth allows you to ensure that your earlier units are stable and that they’re providing you with the cash flow needed to develop or acquire additional units. This cash flow should cover at least 50 percent of your capital needed to develop the next new unit. You never want to borrow more than that, otherwise you’re working for the lender and not yourself.

Lastly, you need to take stock of the franchisor-franchisee relationship and understand that it will evolve as the franchise grows. This is a natural progression, and you need to prepare for it. When you’re able to work together and collaborate and WIN as a team, it will not only benefit your business, but the overall brand.

If you run a franchise company brand, there are things you can do that will make your brand more conducive to becoming a multi-unit model. I’ve helped other franchise brands develop and implement the systems, training and support needed for multi-unit growth, and would be happy to help you, as well. To learn more about evolving your brand into a multi-unit ready franchise, please give me a call at 612-868-0745. We’ll have a confidential conversation about your situation and how I might be able to help.