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What’s Driving the Franchise Industry’s Move toward Multi-Unit Ownership?

Author: Smoothie King
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As a record number of franchisees look to expand their portfolios, they’re proving that when it comes to franchise ownership, there’s often power in numbers.

Multi-unit owners control more than half of the 400,000 franchises in the United States – an ownership figure that continues to climb each year.

Many franchisees are finding that the path to growth and wealth creation can come with more development, although this doesn’t come without a certain level of mastery.

smoothie king restaurant exterior photo

Smoothie King franchisee Greg Thomas has it mastered. Greg has been in the franchise industry for more than 20 years, and he now owns seven Smoothie King locations and 52 hair care franchises across five states.

“While you face different challenges and responsibilities as a multi-unit, multi-brand franchisee, the geographic diversification makes the challenges worth it,” Greg said. “When you’re able to open a few locations with a second or third franchise brand, that industry diversification is also a strong differentiator.”

Expanding his footprint with Smoothie King has been one of the best things he has done from a business standpoint, Greg added.

Additional Locations Can Provide Added Investment Value

By opening additional locations within their primary market, franchisees can benefit from a wider reach and heightened brand awareness on a local level.

“Some multi-unit owners may worry that expansion with the same brand in the same market would cannibalize sales, but it can actually work in your favor,” Greg said. “More people become familiar with your brand name, they’re more likely to frequent your locations, and by staying in a relatively close market, you can still visit your stores and be a hands-on owner if you want.”

smoothie king restaurant drive thru window

Multi-unit franchisees can also optimize business practices and more efficiently manage daily operations, freeing up their time to focus on broader development. When these franchisees invest in a strong second layer of management, they’re often able to take on a higher-level role themselves, while enjoying a greater work-life balance.

Whether they hire mid-level district and regional management or rely on store managers to oversee daily operations, multi-unit owners can move away from the owner-operator model that requires them to be in-store every day.

Multi-Unit Ownership Can Benefit Business at Every Level

Many franchisors offer incentives for franchisees looking to open several locations. That’s because the compound effects that multi-unit ownership creates in local markets can magnify in brand-wide national and international markets.

“Just as multi-unit ownership benefits my Smoothie King business, [Smoothie King CEO] Wan Kim also understands the multi-unit owner model can strengthen the whole brand,” Greg said. “Smoothie King is really supportive of multi-unit operators, and they’ve altered their systems to make sure they’re even more equipped to invest in multi-unit franchisees.”

Investing in a Brand Ready for Multi-Unit Investment

One incentive includes our “3-Point-Play” development deal, providing new multi-unit franchisees with a 40 percent discount off their franchise fees for each store.

“I think 2019 will be a great year for both single and multi-unit Smoothie King franchisees,” Greg said. “And, with continued momentum, I could easily see myself running 20 to 30 stores in the near future.”

smoothie king restaurant side view with parking spots

Alongside a supportive franchisor that encourages multi-unit growth, franchisees’ demonstrated ability to develop competent staff, establish a proven track record of managing multiple locations and exhibit strong financial and operational infrastructure can be key ingredients for making the multi-brand model work.

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