A smart strategy to guarantee your company’s long-term growth is through multi-unit franchising. Learn more about the multi-unit franchise business model for your company in this article, as well as about its long-term advantages and how to be ready for multi-unit franchising in India.
Multi-unit franchise models are now being considered by business owners as a guaranteed approach to expanding their operations and taking advantage of the increasing number of investment opportunities. These organizations eventually establish autonomous business models and stand-alone.
Multi-Unit Franchising in India – A Complete Guide
Franchisees frequently decide to run multiple businesses because the franchise industry is always expanding. A business can expand swiftly and acquire more properties by leasing multiple units.
In many aspects, multi-unit franchises are similar to single-unit franchises, with the exception that they have multiple stores in the same location. Compared to investors who want to manage a single-unit franchise, those who want to operate a multi-unit franchise must invest more money upfront and over time, but they also stand to benefit more from having a higher profit margin.
The daily operations at each franchise location are typically overseen by unit managers because it might be challenging for a single business owner to be present at all of their many locations. The franchisor will receive updates from the owner regarding their network of enterprises.
Key Takeaways
- With multi-unit franchising, one franchisee is in charge of overseeing several businesses, typically in the same location, as opposed to the traditional franchise model. Over the past few years, the multi-unit method has become more and more well-liked.
- Franchise partners must consider a number of factors when expanding their holdings, including infrastructure, resources, franchise processes, the desire for expansion, and the relationship between the franchisee and the franchisor.
- Multi-unit owners typically manage several properties in the same neighborhood. However, there have been instances of franchise alliances that transcended national boundaries.
- The multi-unit franchise model has various advantages for both the franchisor and the organization in charge. The multi-unit trend is expanding because it is becoming more popular as a result.
Benefits of Multi-unit Franchising in India
1. Stability
If you want to feel like you are growing steadily, you can pick this type. Because you may earn money from multiple sources and aren’t reliant on the performance of a single location, you also have a higher probability of success here.
2. Building Strong Ties
Developing strong bonds of trust with his or her partners is what a franchisor hopes to do. Only franchisees who have developed positive ties with the owner over time will be able to continue using a certain brand or service.
3. Risk Taking
The nicest thing about you is that you don’t have to start from scratch because the idea has already been tried and tested at your first franchise, it makes sense to reproduce it, and it isn’t extremely risky. Additionally, unless you have the abilities and knowledge to go multi-regional, you already have a standard operating procedure, making it simpler to swiftly replicate the model in a new location in the same region.
4. Easy Returns on Investment
You can finance yourself with low risk if you decide to pursue a multi-unit business. This is so that you can get money from a public or private bank with confidence if you have a pre-established franchising concept and have established your reputation. Banks are more likely to lend money to someone who has previously operated a firm since they are confident they won’t lose it.
5. Growth Overall
A scheme like this one enables simultaneous expansion of the business, the franchisor, and the franchisee. For a multi-unit franchise model, a franchisor will always search for someone who can motivate a sizable group of people, has experience managing others, is creative and innovative under pressure, has a track record of success, and has a deep understanding of the local market.
Before launching multi-level franchises in India, franchisors need to take into account the following factors.
Before boosting your portfolio in India, think about these 5 things.
1. Finance
The following questions should be asked by franchisors when they pursue national expansion:
- Do I have enough cash flow to maintain my current business while expanding into multiple locations?
- How can I locate the ideal financiers for my growth? Are banks prepared to support my growth?
Before thinking about extending into several units, these are fundamental questions that must be answered.
2. Resource
The currently operating franchised locations must maintain their current level of operation while switching to a multi-unit strategy. While focusing on expanding their business, franchisors must have the correct personnel in place to manage the current unit. Giving up control and empowering your employees to make decisions independently is necessary for a firm to grow.
3. Losses
It is well known that franchisors should anticipate a decline in business as they add additional units. The extent of the dip is what needs to be taken into consideration. Both businesses and the way organizations interact with their franchisors may suffer from a significant reduction.
4. Growth Capacity
Growing larger merely for the purpose of growing larger is insufficient. The market’s desire for the brand, the level of competition, and consumer demand must all be considered by franchisors. Being conceited or having a large number of units is not the point of multi-unit leasing.
5. Infrastructure
Building a strong back of the house is just as crucial as building a strong front of the house at the location. Franchisees must make sure they have the proper personnel in the correct positions if they want to stay ahead of the curve. Employees in administration, human resources, and loss prevention teams are included. Similarly, it’s crucial to have enough resources. Having too many resources is a typical error that can result in financial loss for the company.
Single-Unit Franchising Vs Multi-Unit Franchising in India
Most people’s knowledge of franchising comes from small, independent enterprises. According to this strategy, a franchise parent firm will provide training and business support for a predetermined price to an investor in a single-unit franchise.
In return, the entity agrees to abide by the business’ brand standards and expansion needs by signing a contract.
Most entrepreneurs that decide to franchise do so because it allows them the option to develop their brands, employ tried-and-true strategies and collaborate with loyal clientele.
Because it provides more assistance than an independent business would, the franchise model is popular with both seasoned business owners and individuals who have never owned a business before.
Although single-unit and multi-unit franchise structures are quite similar, single-unit franchises require less capital upfront than multi-unit businesses.
The premise behind multi-unit franchising is that the more businesses you own, the more likely you are to attract new clients, increase sales, reduce operating costs, and increase profits.
Is multi-unit franchising the best option for your Indian company?
For entrepreneurs with extensive experience, multi-unit franchising can be a wise choice, but it comes with more issues than a single-unit franchise. In light of this, it’s crucial to exercise caution and make sure you have the knowledge, resources, and time necessary to make the leap.
Running a multi-unit franchise is still a terrific opportunity to expand your business, increase your income, and leave a lasting impression if everything is in order.
FAQs
Q.1. Does multi-unit franchising have any drawbacks in India?
Since every firm faces some hazards, the risk increases with the number of units. Effective management of the situation could be more difficult if you lack leadership expertise. Given that you have multiple units, you must make sure that your investment is sufficient.
Q.2. What is the advantage of multi-unit franchising for the franchisor?
You have the opportunity to create a larger management team through multi-unit franchising and utilize them across several enterprises. Additionally, you can spend less on marketing and advertising across all of your websites while increasing sales.
In conclusion
if you have the expertise, experience, and motivation to take on challenges, multi-unit franchising can be a suitable fit for you. With the assistance of employees, partners, outsourcing, and diligent effort, you can create a sizable firm.
To learn how to franchise your business in India right immediately, get in touch with Regional To Global.
