Buying 3 Instead of 1: The Case for Multi-Unit Ownership


In this edition of FranNet’s blog, we pose a thought-provoking item for your proposed entrepreneurial agenda. If you’re able to buy a franchise, should you consider buying three instead of one? Welcome to the case for multi-unit ownership. We begin by saying that multi-unit franchise ownership right out of the gate may not be suitable for everyone, but points in favor of the tactic are mounting. Some recent surveys show that as many as 56 percent of new franchise purchases are, in fact, multi-unit contracts. In the food franchise industries, the number is even higher at 75 percent.

When a multi-unit purchase is brought up (usually in the form of a “three-pack”), most budding entrepreneurs conjure up an image of a cash register readout, with the numbers climbing exponentially. However, that’s just the startup costs associated with getting in the game. What about once you’re in? Is it possible that operating costs per location could actually scale lower than with a single unit franchise?

Two answers: yes and absolutely. That’s because franchisee owners with multiple locations can actually lower their overhead expenses per unit, as fixed costs become shared with additional locations. The quest for finding the right economies of scale can, in fact, make multiple franchise locations even more profitable and efficient in the long run. Many experts point out that this concept is especially true among low-margin franchise industries such as quick service restaurants. Because all require key vendor relationships, multi-unit owners can usually negotiate for better deals, which in turn drive down expenses involving volume purchases.

It goes without saying that a multi-unit franchisee obviously requires a higher investment. But, as a budding entrepreneur, you also have to weigh the benefits. First and foremost, multi-units also provide much more stability and an even higher expected degree of success, as the units are no longer depending on just one territory to be judged an overall success.

In addition, it’s a pretty common practice for franchisors to offer reduced fees and even royalty waivers for a multi-unit owner. This is an added enticement for the franchisee ready to enter the game at a higher level of participation from the outset. It’s usually spelled out in great detail, but multi-unit franchisees are sometimes required to pay only a portion of initial start-up fees to “hold” the additional locations and territories while the primary franchise opens its doors.

With multi-unit franchising comes the core concept of consolidation of resources. Your shared advertising, marketing and corporate communication messages will go much further. By marketing each location with a single centralized message, you’re the one getting the 3-for-1 deal now. You can also marshal the frequency and reach by targeting the location with the most need for outreach, becoming much more efficient in getting through to your audience.

It goes without saying that a multi-unit franchisee purchase is still a formidable undertaking. Before you consider this possibility, seek out the advice of trusted legal and accounting contacts. The responsibilities you shoulder will be three times the factor of a single franchise purchase. But, as they say, with great risk comes great reward. In the world of assets, three franchises bring a factor of three to your potential wealth-building exercise of business ownership.

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Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!


Upcoming FranNet Seminars/Webinars and Expos


With one day left to go in this week, we’re looking good and hope you are too. During this edition of FranNet’s blog, we’d like to clue you in on some upcoming webinars and online seminars we have planned. Hopefully, there will be an opportunity near you to hear about our process and what it will take to get you started on an entrepreneurial journey of your own.

If you don’t happen to live close to an area where one of our many seminars are taking place this month, consider joining one of our online seminars. From the comfort of your digital screen, you can soak up all the information on some relevant franchise topics. The online seminars run about an hour in length and are completely free. All you need to do is pre-register by following the link at the bottom of each page. As we close out September, we’ll be talking about career transitions, women in franchising and semi-absentee retail business model franchising. Follow the hyperlinks for each online seminar below:

Our webinars are much more numerous and also spread across the country for your convenience. If you happen to live in or near one of the seminar presentation areas, please make plans to join us in person. Each of these seminar events are hosted by members of the FranNet family and they do require pre-registration—again, at no cost to you. Let’s get right to the calendar, shall we?

We hope that you’ll have an opportunity to join us in person or tune in to one of our online seminar options. It’s a great first step to be among like-minded entrepreneurial folks and participating may just be the final push you need to get started down the road to becoming your own boss.

For a full calendar of events, both online and in-person, for the remainder of 2017, please visit our Franchise Seminars Page on FranNet.com.

Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!


Should You Buy a New Franchise or an Existing One?


FranNet’s blog is a place for budding entrepreneurs to check in twice weekly for inspirational content about becoming your own boss. We know that there are thousands of individuals out there who are plotting this course in their personal lives and we hope to provide them with helpful insight along the way. In this edition, we pose a legitimate question—should you buy a new franchise and start from scratch? Or, quite possibly, should you scour the streets to see if you can’t put your money down on an existing franchise operation? 

As with most subjects we cover, there are two sides to the story. In keeping with our commitment to preach caution and due diligence, we’re going to offer you a nice set of pros and cons. The decision will ultimately be left up to you, but here’s hoping this information will be a thought provoking exercise.

Advantages of Buying a New Franchise

If you decide to begin the investigative process with an aim of opening your very own franchise, you’re going to be in the driver’s seat for a lot of key decisions that may matter to you a great deal. Such as, you may want the final say in exactly which franchise you’ll choose to operate. Another question to ponder--where will my franchise be located? Ostensibly, you will be looking to choose a territory with a site selection/lease convenient to you and your lifestyle. 

Disadvantages of Buying a New Franchise

Depending on the type of franchise you’re interested in owning and your capital position, you likely won’t have the upper hand in negotiating a lower price to begin your business operations. You’ll also have to build up a customer base of your own—possibly from scratch. In all fairness, you likely already knew this fact.

Advantages of Buying an Existing Franchise

To turn a phrase, you just might find a deal out there. Many people avoid buying brand new cars, opting instead for models one-to-two years old for the same reason. There’s much more room to negotiate with an existing franchisee looking to sell their business. In addition, if the franchise is already a successful operation, you get to inherit customers, reputation and possibly even a complete staff.

Disadvantages of Buying an Existing Franchise

There is that one lingering question, isn’t there? Why, exactly, is this existing franchise owner looking to sell? You should maintain a healthy dose of skepticism when you ask probing questions on why someone is looking to get out. While the exterior façade may look shiny and well-kept, it doesn’t mean that the books and balance sheet follow suit. Get to the heart of the matter and make sure you have a clear understanding of the circumstances which led to the sale offer.

Regardless of your preference when you enter the franchise investigative process, there’s certainly nothing wrong with looking at both options. You can easily state your preferences and discuss this with a franchise consultant, such as the ones we employ right here at FranNet. We’ll be there to guide you in your decision making process and can even help you create your own personal pro and con columns.

As with all things weighted by importance, we preach the suggestion to retain professional counsel in both the legal and accounting arenas to help shepherd your thoughts and decisions. Whether you ultimately buy a new franchise, or score the deal of a lifetime on an existing business, we want you to succeed.

Trust us when we say, when you look good, we look good.

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Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!


How Franchises Are Helping Hurricane Harvey Victims


One of the costliest storms in U.S. history plowed into southeastern Texas on August 25. His name was Hurricane Harvey. No doubt you’ve been inundated with news on the storm’s impact and, more recently, the efforts to help the affected areas recover. At FranNet, we wanted to take the time to focus on how the franchising industry is responding to the crisis. We couldn’t be more proud of the efforts our franchise partners are making to ease the suffering of so many people in need. Here are just a few examples…

Circle K: Circle-K announced that all 9,500 of its North American store locations would participate in raising funds for the American Red Cross. In addition, Circle K’s parent company donated $100,000 to the Red Cross for immediate support of its employees and the community. In addition, Circle K also kick-started an internal fundraising drive to assist its employees affected by the crisis, beginning with an internal company donation of $150,000.

Jersey Mike’s: More than 1,300 Jersey Mike’s Subs franchises across the country have teamed up with the Houston and Corpus Christi Food Banks to aid Texas residents affected by the storm. The franchise also announced that beginning Monday, Sep. 11 through Sunday, Sep. 17, all participating Jersey Mike’s locations will donate $1 for every regular sized No. 7 Turkey Breast and Provolone sub sold. Jersey Mike’s will also offer special cards for a free sub in exchange for a $2 donation to the food banks. The company expects to raise more than half a million dollars. 

Papa John’s: The pizza giant’s Houston stores got some well-deserved media attention for providing free pizza to first responders. The organization also coordinated an effort to deliver more than 3,000 pizzas directly to NRG Stadium, feeding those who have sheltered there for the time being. On Sep. 3, Papa John’s has made a commitment to donate $500,000 in relief to storm victims.

Buffalo Wild Wings: The fast casual chain announced that from Sep. 3 through Sep. 17, participating franchise locations will match in-restaurant donations received from patrons, for an amount up to $100,000.

Menchie’s Frozen Yogurt: The self-serve yogurt franchise has announced plans to host a special fundraiser for the victims affected by Hurricane Harvey. On Saturday, Sep. 9, participating Menchie’s franchise stores are set to donate 10 percent of all sales to the American Red Cross.

On The Border: All of the franchise’s restaurants in the Dallas/Fort Worth area, along with Waco and College Station-based locations, will be donating 20 percent from guest’s checks, on request, toward disaster relief in the affected areas of Texas. The fundraiser will be a one-day event, slated for Wednesday, Sep. 6.

Little Caesar’s: A mobile, big-rig pizza kitchen, affectionately named “the Little Caesar’s Love Kitchen,” is currently out on the road throughout Texas, feeding victims and first responders affected by Hurricane Harvey.

Children’s Lighthouse: Franchisees in the Dallas/Fort Worth area have now modified their childcare centers into donation drop-off areas, accepting numerous supplies for Hurricane Harvey victims. Among the collected items include toiletries, blankets, baby formula/baby food, diapers, and wipes. Employees of the franchises have even made trips to Houston to help deliver and pass out the collected supplies.

Russo’s New York Pizzeria: With its corporate operations based in Houston, the franchise organization worked overtime to get their locations back up and running after the storm’s impact subsided, with the aim of providing food to those in need. In addition, Russo’s locations have redoubled their efforts to deliver pizzas to organizations and shelters throughout the affected areas of Houston. 

Examples like these show the united spirit of corporate and individual franchisees to reach out to those in need, especially in times of crisis. FranNet is very proud to work with these and other franchise organizations on the front lines trying to bring relief to the many displaced victims of Hurricane Harvey. There is no doubt our franchise industry partners are up to the challenge…and we may have another concern right on our doorstep. At the time of this writing, Hurricane Irma spins in the Atlantic, ready to take aim at Florida. 

Come what may, we’re confident in how our franchise brothers and sisters will respond.

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Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!


History of Labor Day and Dreams of Becoming a Boss


Yesterday, the U.S. celebrated Labor Day. For a great many of us—maybe not so much franchisees—it’s an extra day off, making a beautiful three-day weekend to herald the end of summer and the beginning of autumn. It’s also a time of reflection for both workers and for bosses. So, in this edition of FranNet’s blog, we wanted to delve into the history of Labor Day, as you—the prospective franchisee—dream of becoming your own boss.

Labor Day is celebrated the first Monday of each September. The first Labor Day was celebrated in New York City in 1882. The first state to make Labor Day a holiday was Oregon and it was President Grover Cleveland who signed legislation making it a national holiday, doing so in 1894.

According to the U.S. Department of Labor’s website, the holiday is “a creation of the labor movement and is dedicated to the social and economic achievements of American workers.” Labor Day is a “yearly national tribute” to the “contributions workers have made to the strength, prosperity, and well-being of our country.”

The history of labor in this country is one full of strife, however. It took generations of time, protracted strikes, and even tragedy to bring about the changes we see today which offer protection to the working class in our country. But it’s something for every American to be proud of. Many countries across the world, including influential global leaders, do not offer the same type of protections for their workforce. And the freedoms we enjoy today are the result of the sacrifice of many to bring attention to labor strife.

As you ruminate on the history and meaning of Labor Day, we pose a question to you. If and when you become your own boss through the franchising route, what kind of boss will you be? Working within the structure and confines of your franchise agreement, will you be open to accepting input from your employees? What voice will they have? How will you protect their rights and responsibilities?

Many prospective franchisees come from a background in Corporate America where they have never fulfilled the role of a boss. But once a franchise owner, you’re thrust into that position. Preparation and consideration for taking on this new role must be accounted for in the investigative process. There just so happens to be hundreds of books on the subject of what it takes to fulfill the role of being a boss, thus charged with forging the careers of multiple employees. You can search for a specific title that appeals to you, but we’ve found a pretty neat little blog which covers the subject nicely. It’s called 17 Simple Ways to Become a Powerful and Likable Boss, written by Geoffrey James, a special contributor to Inc.com.

We at FranNet certainly hope that your Labor Day weekend was both relaxing and productive. Meteorological summer has ended and fall is now on our doorstep. We’re soon to enter the fourth fiscal quarter of 2017 and it’s one that promises to keep us on our toes. In the coming weeks, we’ll continue to provide our twice-weekly blog content for your review, keeping you as up-to-date as possible on breaking news, trending topics and any other franchise updates designed to prepare you for a possible venture into entrepreneurship.

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Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!


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