When becoming a franchisee, you have to decide whether to start as a single-unit or multi-unit owner.
A single-unit owner is typically an owner-operator. They are usually present at their business every day and are involved in most, if not all, aspects of running it. Multi-unit owners are often semi-absentee or absentee owners. They are less involved in the day-to-day operations of each unit because they cannot be in all places at one time.
As a franchisor with 30 years of franchise experience and more than 800 franchise owners representing more than 1,200 locations for five brands, Winmark Corporation prefers to see newcomers to franchise ownership start out as single-unit owners. As a new franchisee, you will develop a strong foundation and sharpen your business acumen by starting off with one unit before moving on to become a multi-unit franchisee.
Here are some of the benefits of starting out as a single-unit franchise owner:
Obviously, investing in one franchise unit is less expensive than buying two or more. If you’re opening a brick-and-mortar concept, you need only be concerned about rent, build-out, overhead, insurance and employee salaries for a single unit. Royalties paid to the franchisor will also be less with one unit as opposed to royalties for multiple locations.
2. Greater Focus
Because owner-operators work at their franchise locations, they learn not only all the systems and operations, but also the nuances involved. Being intricately involved helps the franchisee scale the business because they:
- Observe first-hand the quality of customer service provided by employees
- Easily assess whether employees are following the operations playbook
- Manage quality control of products and services provided to customers
- Spot challenges before they become big problems
In short, owner-operators become experts at running the business, which provides more control and sets them up for success as a multi-unit owner if they choose to expand with additional units.
In addition to having focused control over performance in contrast to a multi-unit owner who may be spread thin, as an owner-operator, you also have control over who is hired. You can bring on board exactly who you want working at your business. As the business owner, you are the most invested individual in your franchise and can select the candidates you deem to be a good fit for business, which will help lead to growth.
Typically, multi-unit franchisees hire a manager for each of their locations because they can’t be everywhere at one time. Some will employ a general or district manager to oversee the operations of all of their stores which may include hiring and managing staff. While multi-unit franchisees can hire managers as passionate about the business as they are, the owner is still removed from bringing on the right people.
You also have more control over costs as a single-unit owner as you oversee day-to-day operations. You can control exactly how much is being spent in various areas, and cut costs if necessary. If you see time-wasting practices, you can implement and enforce efficiencies. This will improve workflow and profits.
4. Fewer Pitfalls
Although owning your own business is a huge responsibility, you have fewer pitfalls to worry about when you own a single unit versus owning multiple units. Some potential snags you can avoid as a single-unit owner include:
- Pressure to open more units by set deadlines
- Significant financial loss if units were to fail
- Difficulty exiting the brand when ready to retire if a transition or succession plan is not in place
- Stretched support for all locations
Winmark wants to make sure each franchisee is successful, and the best way to do that is to award them one unit in one of the company’s five brands when they start out. Once a franchisee has the success of one unit in one brand under their belt, they have four other brands to choose from if they want to add another to their portfolio.
Learn more about franchise opportunities with Winmark Brands.