How Multi-Unit Franchises Increase Profit & Reduce Costs

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Oct 29

Owning multi-unit franchises is one of the fastest ways franchisors grow wealth. Here's why they're a great option for entrepreneurs with a drive to succeed.

Diversification

There are numerous reasons to diversify your franchise portfolio, but for the purpose of this article, let’s focus on multi-unit ownership within a single franchise system. Owning multi-unit franchises has become a popular investment strategy in recent years. Through the combination of lower buy-in costs and opportunities for compounded financial gain, entrepreneurs are choosing to strengthen their portfolio within proven franchise systems that offer long-term growth.

Owning multiple franchises can be a safer investment since a diversification of investments means relying less heavily on one location for primary revenue. The bottom line is multi-unit franchises present scalable opportunities for small business owners to grow their wealth with the backing of a winning brand.

Scalable Investment

In addition to more significant financial gain and security, multi-unit franchise owners often receive discounted franchise fees for every unit acquired after the first one. This benefits both the franchisor and franchisee by facilitating control over a particular territory, ensuring proliferation of the brand.

Economies of scale can be found in inventory buying, marketing, advertising, staffing, and training and are more likely to work in your favor if you’re a multi-unit franchise owner. Given all the cost savings, reduced expenses, and a higher probability of success, multi-unit franchise ownership often earns high ROIs.

Expand With Experience

While some franchisees invest in multiple units from the start, many owners may choose to expand upon their initial franchise once they have gained a strong foundation through experience and community recognition. Upon enjoying the success of their first outpost, expanding their franchise footprint often makes perfect sense.

As a multi-unit owner, it’s highly likely that you have been through it all, from setting up the franchise to managing daily operations, effective marketing campaigns, and the best strategies for optimizing profitability. Oftentimes that means you’ll be aware of and ready to face head-on any challenges associated with establishing a new location.

Multi–unit franchisees begin to develop turn-key business models for what works best. A business plan on paper is one thing; in practice, it can become something very different. The business acumen of a multi-unit franchisee increases as they experience new events — both positive and negative — that impact business.

Entrepreneurs who value the work-life balance that may have drawn them to franchising in the first place will find that multi-unit ownership further supports that goal by allowing owners to hire strong teams to run their businesses at various locations, freeing them from the day-to-day operational responsibilities faced by most independent business owners.

Strength In Numbers

According to a recent study, 54% of all franchises are now multi-unit operations, with the numbers continuing to rise. Currently, 43,212 multi-unit owners control over 223,213 franchised units in the United States. The benefits of multi-unit franchises apply to both the franchisor and franchisee. As a multi-unit franchisee, you own a significant share of the business. In fact, you make more money for the franchisor, which means you have a greater impact on their bottom line.

There are many good reasons to invest in a multi-unit franchise. Whether your goal is to prepare for retirement, build an additional income stream, or grow your impact as a business leader in your community, the opportunity for generating wealth as a multi-unit franchise owner is tremendous. Plus, owning more than one location protects against an economic downturn in ways that a single-unit location would not. There’s also the satisfaction that comes from knowing you are investing in the lives and futures of your employees.

Explore The Scenthound Franchise Opportunity

Unlike other markets, which tend to fluctuate during times of economic uncertainty, the recession-resistant $100 billion pet industry positions a brand like Scenthound as a tremendous opportunity for multi-unit investors. As pet grooming is one of the fastest-growing segments of pet care, Scenthound’s unique wellness-focused, membership-based approach further sets us apart as an industry standout.

Scenthound’s proven franchise model, world-class training, marketing and comprehensive support are designed to provide the perfect foundation for franchise owners to expand their business potential and grow with our brand, from day one and for years to come.

Scenthound