The Attractions And Pitfalls Of Multi-Unit Franchising

The Franchise Magazine:

The number of franchise systems that have franchisees controlling multiple units has increased in recent years.

Although United Kingdom franchisees operate on a relatively small scale compared with the blockbuster multi-unit franchises in the USA, the model is gaining popularity.

It’s often said that the management of the franchisee relationship is the greatest challenge the franchisors face and it would appear for franchisors of multi-unit systems such challenges are only likely to be magnified.

It has been suggested that the rise of multi-unit franchising in the UK may be linked to the strength of the country’s economy. But are there any other explanations for its recent success as a business model?

Franchisees usually operate in their own locality, meaning they bring knowledge of geographic locations and labour markets to the franchise, as well as their own managerial skills and financial capital. Through multi-unit franchising this local market knowledge can be fully exploited. A network of single unit operators is likely to exhibit a wider variation in performance than a group of units operating under the same administrative structure.

Read full article.