Multi-unit franchising is viewed by many as the true path to riches for business owners. It comes from the concept of “why open a single franchise when you can open several?”

For some small business owners, having one franchise isn’t enough. Having achieved a certain level of entrepreneurial success, they realize that they are capable of doing more. This is where multi-unit franchising becomes an attractive opportunity. For the right person, it can be an effective way to build a small business empire.

Profitability

This is the single most attractive benefit of multi-unit franchising. Each additional location increases your opportunity to increase your revenue.

Additionally, certain expenses per unit may decrease as you’re able to spread your costs over multiple locations. As a result, this could free up your budget for additional marketing or training for a more productive staff.

Familiarity

An advantage to opening additional units of the same franchise is that you’re already familiar with its operational processes and procedures.

By adding another location, you are simply doing what you do now, but expanding to another market. This factor alone gives multi-unit franchising a distinct advantage to traditional multi-site businesses, because the franchisor has already done all the heavy lifting by creating a system that ensures a common operating standard among locations. All that you need to do is implement the existing system.

You don’t need to attend training multiple times as you already have plenty of hands-on experience as a single-unit franchisee.

Proximity

For years, multi-unit franchisees have understood that they can leverage the power of regional marketing strategies by opening several locations of the same franchise within a close geographic proximity.

Instead of doing a marketing campaign for one store, you can do it for three – at little or no additional cost. Combined with exclusive territorial rights, you can multiply sites to create a mini-monopoly within the franchise and control the promotions that are available in your region.

Efficiency

Another significant benefit to multi-unit franchising is efficiency of scale; especially, when the franchise locations are situated close to each other.

Just think about the kinds of discounts you could realize by ordering supplies not on a store-by-store basis, but on a regional one such as for many multiple locations.

You could save money by assigning staff to cover more than one location. For example, if your bookkeeper currently does one location at 20 hours a week, there is a good chance that they could do the books for two locations at 30 hours a week. The net savings to the bottom line would be 10 hours a week – a nice boost to the bottom line.

Efficiency of scale also comes into effect with marketing and advertising costs. Say that you own three hair-care franchises within the same small town. Let’s say that the cost to place an ad in the local newspaper that markets your services is $200. You’re able to advertise all three locations in one ad for the same cost. Therefore, why not take that money that you save over time on a newspaper ad, and buy a 30-second radio spot that broadens your message to a larger number of potential customers? Make sense, doesn’t it? This is how 3-for-1 marketing can be extremely attractive to business owners that want to buy multiple locations.

Staffing

Multi-unit franchising offers a unique opportunity to shift staff back and forth between stores because most units are typically geographically friendly. This can be particularly useful during training periods and other occasions when it is helpful to intersperse new employees with seasoned veterans.