For many franchisees, having more than one franchise can be the difference between success and struggle. Today, more than half of all U.S. franchisees have more than one unit. Multi-unit franchisees usually have more experience, a better understanding of business principles, and the ability to move quickly when expansion opportunities become available.
So when you’re considering a franchise opportunity, good business sense suggests that you consider a multi-unit franchise plan from the start. And when considering taking on a multiple franchise locations, there are two important factors to keep in mind: financing and site selection.
Multi-unit Franchise Financing
When it comes to starting a business, money is vital. And the bigger your plans, the more money you’ll need. If you’re seeking financing for multiple franchise units, as with all business loans, it’s important to have information about your assets and liabilities and your plans for growth and revenue before you apply for a loan. Here are suggestions on how you can give yourself the best chance of getting the loan for a multi-unit franchise:
Make a Plan
The first step is to create a strategic plan that realistically estimates the growth you expect to experience in your business. The numbers should reflect the big picture and growth projections for all your multiple franchises together, keeping in mind that some locations will do better than others.
Draw on the Experience, Contacts, and Advice of Your Franchisor
As you create a plan, your franchisor will be a valuable asset for you. They can help you create revenue goals and estimates of how much capital you’ll need, based on other franchises in similar locations and the estimated start-up and operational costs.
Franchisors will also be able to help you choose a lender who is already familiar with the business model. Through their own business connections, they can give you advice on which lenders will be most responsive and which ones specialize in funding for multi-unit franchisees. And if they already have a working relationship with the lender, they should be willing to go to bat for you to help close the deal.
Be Open to Advice From Your Lender
Once you have approached the lender with your plan, be open to the advice they give you. Lenders can help you create a financing strategy that will not leave you undercapitalized as you’re working to get your project off the ground.
Once you’ve received funding and started your project, it’s important to maintain a relationship with your lender. They can help you adjust your growth plan based on performance and celebrate your wins with you. If everything goes as expected, you and your lender will be working together for a long time, so it’s worth it to take the time to ensure that relationship stays strong.
Multi-Unit Franchise Site Selection
After you’ve secured your funding, next up is site selection. Location is one of the most important aspects of having a brick-and-mortar business, and your franchisor will most likely be able to offer a great deal of experience, knowledge, and connections to help select the perfect sites. When choosing locations, aim for the following:
- High traffic area
- Great visibility
- Plenty of good parking available
- Near a competitor
- Near your other franchises
It’s important not to let your emotions take over when performing site selection. For example, having visible signage is more important than the walls already being painted your favorite color. And lots of great parking spots out front can more than make up for ugly, old carpeting that can be easily replaced.
By making sure your franchises are near each other, you can reduce your expenses and overhead through regional marketing and being able to use the same staff at multiple locations. If you own a tax business with multiple locations, for example, it will be easier for employees to go from being a tax preparer to office manager to regional manager and more. Your staff will have better opportunities to move up the ladder within your organization. This will attract more highly qualified and driven applicants who are more likely to perform well and be promoted.
If you’re looking for a highly rated multi-unit franchise option, consider Liberty Tax®, the number one-ranked non-food multi-unit franchise. With millions of taxpayers needing help each year, tax preparation is a pretty solid business choice that lends itself well to multiple locations.