Multi-Unit Franchise Ownership: What to Consider and 7 Tips to Ensure Success
Owning a franchise can diversify your portfolio and build wealth, but what if you could amplify that success with multiple units? Owning multiple franchises can be a lucrative investment, but there are many things to consider. Learn what it takes to qualify for multi-unit franchise ownership and how to find success.
Advantages and Disadvantages of Multi-Unit Franchise Owners
There are about 43,230 multi-unit franchisees in the U.S., operating 227,244 locations, according to FranDATA. They control 53.9% of all franchises. Owning multiple franchises offers the potential for increased revenue. You can tap into different markets and diversify your income streams. Certain operational costs can also be spread across several units, potentially leading to higher profit margins. However, multi-unit ownership also presents challenges. Managing multiple locations requires a higher level of oversight and coordination. It also demands a significant upfront investment, especially if you want to open units simultaneously.
How to Succeed as a Multi-Unit Entrepreneur
To qualify for multi-unit ownership, franchisors often look for individuals with a strong financial background and proven experience in business management. Candidates with a high net worth are attractive because they have the financial stability to support the growth of multiple units. Here are tips to help ensure your success with multiple locations.
- Do the research: Not all brands are ideal for multi-unit ownership. Choose a brand with a proven track record, robust support systems, and a high-demand product or service.
- Start small and scale: If you're new to franchising, consider starting your multi-unit agreement by opening a single unit to understand the business model and operations. Once you're comfortable and the first unit is successful, you can add additional locations.
- Secure adequate financing: Multi-unit ownership requires a significant financial investment. Ensure you have enough capital for the initial investment, operational costs, potential challenges, and expansion plans.
- Hire strong management teams: As an owner, you can't be everywhere at once. Hiring competent managers for each location is crucial. Invest in their training and professional development.
- Implement centralized systems: Centralize your operational, financial, and marketing systems to help streamline processes and maintain consistency in service and product quality across all locations.
- Stay engaged: Even with managers in place, stay engaged with each unit. Regularly visit your locations, engage with staff, and solicit feedback from customers.
- Leverage franchisor support: Take full advantage of the training, marketing, and operational support from the franchisor. The franchisor has a vested interest in your success and should offer resources tailored for multi-unit owners.
The Tailored Closet: A Multi-Unit Opportunity
Brands like The Tailored Closet, which offers customizable solutions for home organization, are prime examples of franchises that can thrive as a multi-unit model. Fast food tops the list for the highest number of multi-unit operators.
But, 45.29% of franchises offering general services, such as home services, are owned by multi-unit operators. In addition to being an attractive option for multi-unit operators, the home organization industry has seen a surge in demand as homeowners look to maximize their spaces and add value to their homes. At least 14% of homeowners remodeled their closets in 2022, according to a study conducted by Houzz.
Our low-cost franchise opportunity focuses on customizable solutions and caters to a wide demographic, from homeowners to small businesses, ensuring a broad customer base. The initial investment for a single The Tailored Closet location starts at $155,220. Each of our territories has approximately 100,000 households. The average sales for 28 of our franchisees with multiple territories was $1,088,849 in 2022.*
Partnering with us offers another significant advantage: support. From your initial training to ongoing operational guidance, marketing strategies, and more, we provide the tools and resources necessary for success. Our comprehensive support becomes even more critical in multi-unit ownership, where challenges are magnified.
Inquire now to get more details about becoming a franchisee in the home organization industry with The Tailored Closet.
*This is a historical representation of what some of The Tailored Closet’s franchised agencies earned, as described further in Item 19 of the FDD.