Can Multi-Franchise Ownership Work for the Smaller Franchisee?
by Ed Teixeira
Is it possible and practical for a unit franchisee to own and operate
different franchise brands?
There are a number of multi-unit franchise operators that operate more than
one franchise concept. For example, the August issue of Franchise Times
identified the top 200 restaurant franchisees. Companies like New Jersey based
Doherty Enterprises, which operates 61 Applebee’s and 29 Panera Bread locations
and Sun Holdings, LLC of Irving, Texas which operates 72 Popeye’s and 71 Burger
King’s are examples of these diverse multi-unit franchise companies.
Individual franchisees can take a lesson from these multi-unit franchisees and
if qualified should consider franchising several complementary brands. There are
obstacles to this strategy which can come from the franchisor. Franchisors that
market unit franchises often prefer that the franchisee devote all of their time
and resources to developing that single franchise unit. While other franchisors
allow qualified franchisees to own and operate multiple locations, they may
prefer to have a single unit operator. This was my approach when I operated
various franchise companies. Yet, in retrospect given the right circumstances, I
can make a strong case for a franchisee operating multiple franchises. If
certain conditions are met than a franchisor might wish to consider this
Franchisor benefits from franchisee multi brand ownership:
- Attract more qualified and competent franchisees
- Collaborate with complementary franchisors on franchise
recruitment and marketing activities
- Franchisees could generate additional revenues from other
- Increase market share
- Franchisees could be operationally and financially stronger
Following are requirements for this concept to be successful:
- Franchisee must have the financial resources and business
skills necessary to launch and operate multi franchises.
- The franchise brands must be conflict free. For example, a
home care and massage therapy franchise shouldn’t conflict with
- Identify economies of scale for the franchisee
- Franchises must be compatible from a territory standpoint
Franchisors could consider franchise brands that could complement one another
and enable franchisees to own and operate multi brands. This could enable
smaller franchisees to duplicate what large multi brand franchisees accomplish
but on a smaller scale.
© 2012 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at firstname.lastname@example.org
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