Franchisors that prioritise multi-unit expansion often offer incentives to do so
Many business startup owners dream of building a business empire – and many franchises are willing to help them. Expansion is easier with a franchise. They offer a proven model for operating the business, so once you have one outlet up and running successfully, it’s easy to apply the same model to the next – and the next.
This suits franchisors because they can choose franchisees who have proven to be successful to help them expand their market share with less risk than a newly-recruited franchisee might pose.
It suits franchisees who want to expand because they can apply the same model to new outlets.
Going for growth from day one
Many franchises prefer to recruit franchisees who want to open second, third and fourth outlets quickly. It’s a fast route to business growth, and it is particularly prevalent in the fast food and fitness sectors.
Pizza franchise Papa John’s, for instance, is currently only looking for people who want to become multi-unit franchisees, so it looks for people who have expansion built into their business plan.
Amit Pancholi, UK director of business development, at Papa John’s UK, says: “Franchisees may be looking for a store of a certain size today, but we need to consider what a cluster of stores will look like in five years from now.
“We’re invested in finding the right locations and size of stores for franchisees as this means they will be able to satisfy more customers, generate higher sales and be ready to accommodate the future growth of their businesses.
“At the same time, the more convenience we can create for customers, the more revenue can be generated, resulting in a better outcome for franchisees, more secure jobs for their staff and better results for Papa John’s. It’s about creating a win-win-win situation for everyone.”
Franchisors that prioritise multi-unit expansion often offer incentives to do so.
The investment for one traditional format Papa John’s new store opening is typically between £185,000 and £225,000, of which £100,000 must be in liquid funds, but the franchisor offers incentive deals for expansion. They depend on the franchisee in question and are updated annually.
Not just food franchises
Franchises in many sectors are getting the urge to go multiple now.
Paul Lewis, managing director of Pitman Training, says: “Pitman currently has 80 locations in the UK and Northern Ireland but we expect to increase this to 100 in the next five years. We plan to do this through sustainable multi-unit ownership.
“There are many benefits to multi-unit franchise ownership. Not only does it give you access to larger teams, which ultimately offers you more freedom, but owning multiple units can also translate to higher profits.”
He advises single-unit franchisees: “When considering becoming a multi-unit franchise partner, never underestimate the power of hands-on experience. It’s likely that you have been through it all, meaning you’ll be aware and ready to face head-on any surprises and challenges associated with establishing a new location.”
Lifestyle franchisees can go multi-unit too
Many lifestyle franchises are traditionally owner-operator models, where the franchisee does the work themselves, albeit often aided by staff. But that does not mean you cannot grow your business by taking on new franchise areas.
Kevin Thackrah, director of the PetPals pet care services franchise, has seen an increase in the number of franchisees in his network expanding to multiple locations and thinks this is just the beginning of the trend in his company.
“This increase has been caused by the rise in demand for expert petcare, which has also been triggered by the spike in pet ownership during the pandemic,” says Kevin. “We now offer both an owner-operator model and a management model to prospective franchisees who want to employ managers to expand their business, so whatever your aspirations are, we can support you. Offering multiple business models allows franchisees to focus on building the business they want, while also getting support from our wider franchisee network.”
The man who runs 15 outlets – and counting!
Abid Hussain joined Papa John’s in 2016, having worked in advertising, marketing and web consultancy. Today he runs 15 Papa John’s outlets with the help of his team and has further plans to expand as the right sites become available.
“After working in an office, Papa John’s was something a bit different,” says Abid. “I was looking for a new challenge and a friend of mine ran a Papa John’s store. I did some research and thought buying a franchise could be a great move for me – it was! Initially, I became a partner in the Taunton Papa John’s, run by my cousin, where I learned more about the company and how the stores operated. I took over the store in 2016.
“At first, running any new business is challenging. Fortunately, the team on the ground were really good and this enabled me to find out all I needed to know. With support and training from the Papa John’s central team, I was able to improve sales and soon I bought two new franchised Papa John’s in Eastleigh and Fareham.
“I used my marketing know-how for digital campaigns and leafleting and some direct mail too. The staff were well trained and customer service prioritised and soon sales started to grow.”
Abid was named as Papa John’s UK Franchise Owner of the Year (for five stores or less) in 2018.
“Running multiple franchised stores offers economies of scale in relation to ordering and marketing and it can make recruitment easier too,” he says. “ Once you’ve hit on a successful formula, why not replicate it many times over?”
For multiple outlet franchisees, staff management skills are vital. Abid says: “Motivating staff and ensuring they have what they need in terms of equipment plus good training is key to keeping the best people.”
Running eight franchises units while finding time for family
“When I started out in franchising, I had no intentions of becoming a multi-unit franchise partner,” says Chris Wyle, who started his first Pitman Training franchise in 2013. “I thought having multiple outlets would mean I’d have to work more than the usual full-time hours – but on the contrary, I’ve found that the more franchise units you open, the easier it gets.
“This is because the more centres I have opened, the more people I have around me to make my life easier. I constantly surround myself with people whom I believe are better than me at what they do – this way my blind spots are covered, and my businesses are thriving.” Chris has also found a level of comfort in the help he gets from the franchisor and the other franchisees in the network. “Other people are involved in the same project. It’s a real team effort and, even if you’re a one-centre owner, you’ll never feel alone,” he says. Three years after starting the business in Birmingham, Chris decided to open another training centre and has now grown his business portfolio to include eight Pitman Training territories.
“I’m very focused on being a good dad, walking the dog and doing the school runs on both ends of the day – being a multi-unit franchise partner doesn’t stop me doing any of this,” says Chris. “I’m also always home for breakfast and dinner as spending time with my family is massively important to me.
“The biggest challenge I’ve faced as a multi-unit franchise partner is ensuring consistency as you scale up. For instance, there are administrative complexities as the more people you employ, the more paperwork there is to complete - but it’s all worth it at the end of the day.”
Chris advises: “If you are looking to become a multi-unit franchise partner make sure you’re financially well-resourced. There will be hiccups, and no business journey is straightforward so, having something to fall back on when times are tough is important.”
Going multiple was a pet project for Peter
Peter Lea’s experience as a customer of Petpals led to him becoming a franchisee with two franchise areas: Petpals Bracknell, and Wokingham and Sandhurst.
“I’d been a Petpals customer for 12 years before I purchased the franchise in February 2018,” says Peter. “The franchisee at the time, Ruth, had brilliantly cared for my dog and so I was confident that Petpals offered a fantastic service and business offering to its customers.”
Once he had committed to taking over the two areas, he had a handover period with Ruth. “She gave me valuable insight into how to run the day-to-day operations of the business effectively. I also found the Petpals head office very supportive,” he says.
Since taking over Peter’s business has grown, with his pet-care team doubling in size.
Benefits
“The main benefit of owning multiple franchise locations is the scale of impact your business can have,“ he says. “My locations are next to each other, so word of mouth recommendations of our service tends to spread to both locations. Also, with larger staff teams, you can share knowledge and resources to get the best outcomes for your customers.”
Challenges
“The biggest challenge of owning multiple locations is keeping on top of the entire business. Finding the right people to trust and delegate to will make a big difference to you and your franchise. As a business owner, it’s sometimes hard to let go of responsibility, but great leadership comes from empowering others to help run your business,” he says. “The right staff and the right systems will put you on the road to success.”
Peter advises: “Start with one franchise location before expanding. I was fortunate to join an established franchise network like Petpals, which gave me the tools to succeed. However, without a strong support package in place, running multiple locations at the same time could be a tough undertaking for a new franchisee.”
Multi-brand franchising
There are even multi-brand franchises, that enable you to open units with not just one franchise brand but several. This brings the benefit of business diversity – if the market in one sector takes a downward turn, you can be still earning income from another.
Mark Abell, head of franchising at international law firm Bird & Bird says: “I expect multi-brand franchising to get more common going forward.” Multi-brand franchisors have more reason to invest in better infrastructure and franchisees may have more staff, with a wider range of expertise, to help them.
Neighbourly, originally a US franchise, now owns eight brands in the UK, including Dream Doors, Countrywide Grounds Maintenance and Drain Doctor (among others). All are in the home maintenance sector, so franchisees with several of the brands can cross-sell different services to the same customers. Once a multi-brand franchise gets to know you as a reliable franchisee, it is more likely to consider your plans for expansion with its other franchise brands.
The time for expansion is now
Fintech business lender MarketFinance surveyed 2,000 SME owners across the UK and found:
• Half of SMEs are confident that customer demand, as well as turnover, will increase in six to 12 months, and the majority expect to grow over the next three years
• 70 per cent of SMEs are planning to ramp up business investment, with a quarter intending to hire staff and upgrade equipment or machinery
• 81 per cent of SMEs plan to invest in sustainability as part of their growth strategy, while a third are exploring global markets or considering mergers and acquisitions within a year
Going multiple means changing your approach
Running multiple franchises means changing the way you work. You will be:
• Using your management skills more
• Becoming less hands-on in the day-to-day running of the business
• Spending more time on strategy and planning
Franchisors know how to help single-unit owners to transfer to multiunit franchisees, and typically provide management training to help them, so before you go multiple, find out what’s on offer.
The author
Linda Whitney writes about franchising for the Daily Mail, What Franchise and many other publications.
