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Why More Franchises Are Allowing Multi-site Owners

The latest trend in the franchising world is to favor multi-site owners over single-site owners. But when franchising started, the franchisors usually preferred single-store owners. Then what are the reasons behind this shift? Here are some of them:

1. The franchisor doesn’t have to invest in expanding the market with a multi-site owner. With a single-store operator, the problem was that the franchisor had to look for more than one franchisee in order to cover a big market. Then he had to help them with site-selection and other preliminaries and then train each and every one of them. But with multi-site franchisees, their jobs have been cut short to some considerable extent. They sell an area and it is the duty of the multi-site owners to develop the market. They will be the one who will find new sub-franchisees and help them in setting up the store. The multi-site owners can also train them under regional training offices, leaving the franchisor in quest for new market. Hence, the franchisor can grow at a faster rate.

2. The multi-site owners are more financially stable than single-store owners. They are more favored by the lenders, as they promise greater return for their investment. Moreover, as most of the time they are established businessmen; the multi-site owners have more liquid capital in their hand. They also know how to prepare a business plan effectively in order to impress a lender. But a single-site owner, most of the time, is a new player of the market. The franchisor need to guide him extensively in preparing a business plan. He is also supposed to provide financial help directly or through third-party lenders.

3. The multi-site owners are better prepared for franchising business than single-operators. Most of them are already established players in contrast to single-store owners who are novices. Hence, they can run the business smoother.

4. The multi-site franchisees are less risky investment than single-site owners. This is because most multi-site owners are franchisees who have already proved their mettle. So, they need little guidance and the franchisor knows that their business is in safe hands.

Considering whether a single or multi-site is best for you? Go to Franchise Ultra Lounge, the franchise industry’s leading social networking site, where you can discuss with experts, franchisors and franchisees.

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