How Multi-Unit Franchising Can Lead to Higher Profit
There are many ways to increase your bottom line as a franchisee. A common trend growing in popularity is owning more than one franchise unit. In fact, more than half of all franchised units in the United States today are owned by multi-unit franchise operators. That calculates to 43,212 multi-unit operators controlling more than 223,213 franchised units in the U.S. Why? Multi-unit franchising has many benefits that yield big gains for franchisees.
Multi-unit franchising exists in two ways. First, you may purchase the rights to develop and own multiple franchise units in an exclusive territory under one brand. The second option is to operate franchise units of multiple brands to diversify a business portfolio. Entrepreneurs who own multiple franchise brands often form their own corporations.
No matter how you do it, many entrepreneurs look at multi-unit ownership as a great way to improve profitability and possibly reduce risk.
The Pros and Cons of Multi-Unit Franchising
The benefits of owning multiple franchise units are simple economics. More business means more sales and more profit opportunity. Your return on investment is elevated. In many ways, everything gets easier because you’ve already done it once. You’re already following a solid business model, and now you’re multiplying that model. The advantages affect your overhead, which includes the potential for better supply pricing by vendors with higher bulk orders. Not to mention the already successful marketing plan in place grows exponentially, highlighting all your owned units.
Bigger often does mean better in this situation, but it is important to remember that increased size means the bottom line also increases. Employee benefit package costs may decrease as your organization becomes larger. Those benefits are very appealing to attract good employees. On the other hand, additional franchise units translate to the need for more employees to run your operation. Attracting competent workers, including managers overseeing all locations, will be a challenging task.
If you are franchising with several brands, it could be challenging to navigate the nuances of each business model. Your job will evolve to following and understanding the differences in trends and consumer behaviors across the industries in which you’ve invested. You have made a significant financial investment in these franchise brands, which can make or break you.
What to Consider
Before you dive into the multi-unit side of franchising, it’s best to get incredibly organized. Have a full understanding of operations, training and support you’ll receive from the franchisor. Understanding finances and how they change when you increase overhead and subsequent sales is key to success. Financially speaking, be very certain that you can afford additional units. For those new to franchising, consider the conservative approach by increasing unit sizes one location at a time, and make sure you are comfortable with the profitability of your existing franchise units before adding more.
AAMCO Franchise Opportunity
AAMCO is a well-known automotive franchise specializing in car repair, especially transmissions. People trust them for their expertise in complex car repairs. AAMCO’s successful business model, along with training and support, gives franchisees a profitable and lasting chance for success.
The widespread national presence of AAMCO franchises underscores the brand’s scale and universal appeal. AAMCO is the top leader in transmission repair franchises. They prioritize customer trust, strategic marketing, and strong support for franchisees.
To learn more about starting a successful transmission repair franchise, request a free franchise information report.
