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What to look for when choosing a multi-unit franchise brand.

July 5, 2016

As a multi-unit franchisee which brand you choose is the biggest decision you'll make and invariably there are many questions you need to ask. What are the factors you need to take into account before making a choice? What are the strengths and weaknesses of the options? What type of product will continue to return profits year after year? What are the questions to ask in the initial stages of making a choice? At the Multi Unit Franchise Conference in 2016 the team pulled together some big industry players and asked the questions you need answers to.

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First, we meet the panel of 4 multi-unit franchisee owners. We have Dave Goebel from Pie 5, Eric Werner of Texas Subs, Tom Garrett with Burger King, Popeyes and Arby’s and Matt Kelley from North Point Advisors. Let's crack on...

There are two growth stages to consider when looking a new brand as a multi-unit franchise.


Choose an emerging brand with less than 200 units.

An emerging brand doesn’t have the strong brand awareness that more established brand like SUBWAY has. The systems and processes are less tested, and the marketing team is likely still trying to find a dependable, repeatable marketing strategy. The counterpoint to this risk is that an individual franchisee can contribute more to the brand. Newer concepts can be more open to feedback and working with franchisees on innovation.

 

Choose an established brand. 

An established brand is going to deliver more dependable returns for franchisees. Established brands have strong consumer brand awareness, an established marketing strategy and systems & processes are tested and proven across all kinds of markets. An additional advantage is established brands have survived through consumer trends and recessions. The last thing a multi-unit franchisee wants is to choose a brand that is a fad which fades in popularity over time - so keep in mind “the newest thing might be a trend”. 

Once you've established what growth stage you'd like your brand to be it's time to look at a few more specifics.

 

Choose something you're passionate about.

Dave mentioned that it really comes down to what you’re passionate about. If you can get up in the morning excited about what you do, then you’ll have the stamina to push through and make the business a success when it gets tough. That passion is the reason many multi-unit franchisees are multi-millionaires!

 

Trust the processes.

Once you choose a brand, the marketing, systems and processes are all worked out for you. The beauty of franchising is that it’s up to you to essentially just be a good operator! Look after your people, do the research and develop yourself as you go.

 

Give the people what they want.

The three staples for Americans for the last 50 years have been pizza, burgers and sandwiches. All 4 panelists agreed if you choose one of these you can’t go wrong!

 

Ask good quality questions.

In terms of looking deeper at a brand, you’ll need to look at the comparative year on year growth, or ‘comping’. You can find this out by talking to franchisees and asking things like:

  • Are you interested in more stores?
  • What are your plans?
  • Are you making money?
  • Are you happy with your franchisor?
  • Did you see a return in less than 2 years?

Visit the franchisees, visit the stores and talk to associates, managers and customers about the brand. An unconventional source of information is to ask the banks. What brands would they like to be invested in?

 

The panel's pick (unsponsored, of course!)

The panelists used Jimmy John’s as a great example of a brand to invest in. Great average ticket value, room for growth, good cash-on-cash return and franchisees keep building stores.

ZUUS Workforce have been working with multiunit franchisee owners for years, delivering effective and cost effective solutions for staff scheduling and payroll. If you want to learn how ZUUS Workforce can work for you, request a demo below.

 

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About the Author: Michael Pullman

Michael Pullman

Michael loves working with franchisees and franchisors to introduce cool technology. He's passionate about using data to help managers make great staffing decisions. He loves flying, climbing trees and playing in the snow.