Multi-unit franchising is a good way to ensure long-term growth for your business. Read this article to know more about the Multi-unit franchise business model for your business, its long-term benefits, and how to prepare yourself for multi-unit franchising in India.
Entrepreneurs are now looking at multi-unit franchise models as a surefire way to grow their businesses and take advantage of the growing number of investment possibilities. Eventually, these groups become independent business models and stand on their own.
Multi-Unit Franchising in India – A Complete Guide
The franchise business is always growing, and franchisees are always choosing to own more than one company. Multi-unit leasing is a great way for a business to grow quickly and increase its holdings.
Multi-unit franchises are like single-unit franchises in many ways, except that they have more than one store in the same area. Investors who want to operate a multi-unit franchise must invest more money upfront and over time than those who want to operate a single-unit franchise, but they also stand to gain more from having a larger profit margin.
Since it can be hard for a single business owner to be hands-on at each of their different sites, many choose to hire unit managers to oversee the daily operations at each franchise location. The owner will oversee their network of businesses and report back to the franchisor.
Key Takeaways,
- One franchisee manages many businesses, typically in the same location, which distinguishes multi-unit franchising from the traditional franchise model. In the past few years, the multi-unit model has become more and more common.
- When growing their holdings, franchise partners must think about several things, such as infrastructure, resources, franchise systems, the desire for growth, and the bond between the franchisee and the franchisor.
- Traditionally, multi-unit owners run multiple units in the same area. But there have been cases of franchise partnerships that went beyond countries and boundaries.
- There are many good things about the multi-unit franchise model for both the franchisor and the entity in charge. This makes it more appealing, which is why the multi-unit trend is growing.
Benefits of Multi-unit Franchising in India
1. Stability
You can choose this type if you want a steady sense of growth. Here, you also have a better chance of being successful because you can make money from more than one place and won’t be dependent on the success of just one place.
2. Building Strong Ties
One thing a franchisor wants to do is build trusting relationships with his or her partners. Those who want to stick with a certain brand or service under a franchise will only be able to do so if they have built good relationships with the owner over time.
3. Risk Taking
Because the plan has already been tried and tested at your first franchise, it makes sense to copy it, and isn’t very risky so, the best thing about you is that you don’t have to start from scratch. Also, you already have a standard operating procedure, making it easier to copy the model quickly in a new place in the same area, unless you have the skills and knowledge to go multi-regional.
4. Easy Returns on Investment
If you want to go the multi-unit franchise route, you can finance yourself with little risk. This is because if you have a set franchise model, you have already built up your reputation and are a safe bet to get money from a public or private bank. When someone has run a business before, banks are more likely to give them money because they know they won’t lose it.
5. Growth Overall
This is a kind of model that makes it possible for the company, the franchisor, and the franchisee to all grow at the same time. For a multi-unit franchise model, a franchisor will always look for someone who can inspire a large group of people, has a track record of being a manager, can work and come up with new ideas under pressure, has a history of success, and knows the market in their area very well.
Here are some factors Franchisors need to consider before expanding their business into multi-level franchises in India.
5 Factors to consider before expanding your portfolio in India
1. Finance
While considering expansion across the country, it is necessary for franchisors to ask themselves:
- Do I have sufficient cash flow to keep my current business running while growing into multi-units?
- How can I find the right investors who will finance my growth? Will banks be ready to fund my growth?
These are basic questions that need to be addressed before considering expanding into multi-units.
2. Resource
When moving to a multi-unit plan, the franchised units that are already open need to keep running at the same level. Franchisors need to make sure they have the right team in place to run the current unit well while they work on growing the business. Getting a business to grow means letting go of control and giving your team the power to run things on their own.
3. Losses
It is common knowledge that franchisors can expect their first unit’s business to go down as they open more units. What needs to be thought about is the size of that dip. A big drop can hurt both businesses and change how entities work with their franchisors.
4. Growth Capacity
Getting bigger just for the sake of getting bigger is not enough. Franchisors must determine how much the market wants the brand, look at the competition, and check how much people want the brand’s products. Multi-unit leasing is not about being vain, and the goal is not to have a lot of units.
5. Infrastructure
It is important to build a strong front of the house at the place, but it is also important to build a strong back of the house. To stay ahead of the curve, franchisees need to make sure they have the right people in the right places. This includes administrative and human resources workers as well as loss prevention teams. In the same way, it’s important to have enough resources. A common mistake is to have too many resources, which can cause the business to lose money.
Single-Unit Franchising Vs Multi-Unit Franchising in India
Most people know most about franchising through single-unit businesses. Under this plan, an investor in a single-unit franchise pays a set fee to get training and business help from the franchise parent company.
In exchange, the entity signs a contract saying that it will follow the company’s brand guidelines and business growth requirements.
Most business owners who choose to franchise do so because it gives them the chance to build brand recognition, use tried-and-true methods, and work with customers who already trust them.
The franchise plan is liked by both experienced business owners and people who have never run a business before because it gives more help than an independent business would.
There are many similarities between single-unit and multi-unit franchise models, but investors will pay less upfront for a single-unit franchise than a multi-unit business.
Multi-unit franchising is based on the idea that the more businesses you own, the more likely you are to get more people, make more sales, save money on operations, and make more money.
Is Multi-Unit Franchising Right for your business in India?
Multi-unit franchising can be a good choice for business owners with a lot of experience, but it has more problems than a single-unit franchise. Keeping this in mind, it’s important to be careful in your quest and make sure you have the skills, money, and time to make the jump.
Still, if everything is in place, running a multi-unit franchise is a great way to grow your business, make more money, and leave a lasting memory.
FAQs
Q.1. Are there any disadvantages of multi-unit franchising in India?
Every business has certain risks, so the more units you have, the more the risk. Unless you have experience in leadership it could be more difficult to manage things effectively. Keeping in mind that you have more than one unit, you need to ensure having sufficient investment as well.
Q.2. What is the advantage of multi-unit franchising for the franchisor?
Multi-unit franchising gives you the chance to build a bigger management team and use them in more than one business. You can also save money on advertising and marketing for all of your sites and make more money by selling more.
In conclusion,
Multi-unit franchising could be a good choice for you if you have the knowledge, experience, and drive to take on challenges. You can build a large business with the help of people, partners, outsourcing, and hard work.
Contact us at Sparkleminds to know how to franchise your business in India right away.
