How To own MULTIPLE FRANCHISE UNITS. Prepared by:

Size: px

Start display at page:

Download "How To own MULTIPLE FRANCHISE UNITS. Prepared by:"

Dwight Thornton
5 years ago
Views:

1 How To own MULTIPLE FRANCHISE UNITS Prepared by:

franchises does not require the same skill set as owning a single store. Purchasing multiple units requires significantly more liquidity than buying a single store.

2 Are you not only interested in owning a Hot Dog on a Stick franchise, but building a hot dog empire? Before you take on this ambitious goal, there are a few things that you need to know about becoming a multi-unit franchise owner, including: Owning multiple franchises does not require the same skill set as owning a single store. Purchasing multiple units requires significantly more liquidity than buying a single store. There are advantages to owning multiple units over a single unit. What skills do you need when you own multiple units? How much liquidity does it take to open multiple units? What are the advantages of owning multiple units? HOT DOG ON A STICK 2

Five Skills of Multi-Unit Owners When you own one franchise store, you re involved in every aspect of the business.

You do all this because your store is like your child; you give it everything that you have to make sure it succeeds. However, your role changes when you go from owning one store to multiple stores.

Instead, you have to become a franchise emperor, a king who can look over his empire and see where he is needed most.

3 Five Skills of Multi-Unit Owners When you own one franchise store, you re involved in every aspect of the business. You re behind the counter talking with customers, in the back counting inventory, and filling in when your employees don t show up to work. You do all this because your store is like your child; you give it everything that you have to make sure it succeeds. However, your role changes when you go from owning one store to multiple stores. You can no longer be the highly involved manager that you were at your first store because you simply can t be everywhere at once. Instead, you have to become a franchise emperor, a king who can look over his empire and see where he is needed most. To become this franchise king, you need to develop a certain set of skills, skills that are very different from that of a manager. Below are the top five skills that a multiunit franchise owner must learn before they can rule their business empire. While you can no longer be as involved with each franchise location as you were with your first store, it doesn t mean that you are any less dedicated. In fact, you will need to be more dedicated than ever before. For instance, the simple logistics of running a business will multiply when you own more than one store. You ll have more deliveries to keep track of, more employees to pay, and more customers to keep happy. It s easier to be dedicated when you re passionate about your franchise. When you love and believe in your franchise, you thrive on the challenges you encounter. When you lose your passion, those same challenges can overwhelm and suffocate you. When you re a multi-unit franchise owner, you need to have an eye for talent. You need to be able to discern which employees will become phenomenal managers four or five years from now. By building up a strong team of employees, you ll have a pool of managers you can trust and rely on to move into each store that you open. When you find these exceptional individuals, make sure that they know there is opportunity for growth and advancement within your franchise chain. Offer incentives and rewards to snag them long-term. While developing a team of managers is initially expensive, it pays off over time when you have experienced managers running each of your stores. All of these responsibilities demand your attention and you ll need to be dedicated to your business empire if it has any hope of surviving. HOT DOG ON A STICK 3

Building a team of superior employees is just one hurdle you need to overcome. The next hurdle is learning to let go and rely on these managers. After all, that s what you hired them to do.

4 Building a team of superior employees is just one hurdle you need to overcome. The next hurdle is learning to let go and rely on these managers. After all, that s what you hired them to do. You promoted them to managers because you knew you could trust them. While delegating sounds simple enough, it s one of the most difficult struggles multi-unit franchise owners have to overcome. You still want to be as involved as you were in your first store, but the fact of the matter is that you can t. Relinquish some your responsibility and give your managers the chance to shine. Finally, patience is the last virtue you ll need to become a multi-unit franchise owner. When you own multiple stores, you re not going to see immediate results. For instance, some stores will have more problems than others and you ll need to invest more time and energy into these stores. In addition to taking time, multiple stores also require more capital, which can put a strain on your bank accounts. Make sure you re prepared to weather the initial storm of owning multiple units so you can overtime see the results of all your hard work. So, are there any skills that you need to master before taking on your next business venture? Financing for Multiple Units Once you ve mastered these skills, it s time to look at your finances. You need to make sure you can actually afford the initial cost and upkeep of each of your units. Franchisors determine whether or not you can afford to own multiple units by looking at your liquidity. Remember, liquidity is all of your assets that can quickly be turned into cash. The more stores you want to own, the more liquidity you need to have. In essence, your franchisor needs to see that you have the resources to support all of the franchises you own. It s as simple as that. FRANCHISOR ASSISTANCE That being said, many franchisors will offer you various discounts if you sign up for multiple stores. In fact, multi-unit owners are a franchisor s ideal franchisee. This is because franchisors know that their costs will decrease when they have an experienced owner running multiple stores. For instance, if you already own one franchise location, you already understand how the chain of command works. You don t need to be retrained over and over again for each additional store you own. This means that the franchisor saves money on having you own an additional franchise because they don t have to train someone new. Since franchisors can decrease their costs in this way, they often offer multi-unit owners discounts on the initial purchase of their stores and on the royalties that they pay. If you re considering becoming a multi-unit franchise owner, make sure to ask your franchisor if they offer any of these discounts. HOT DOG ON A STICK 4

Three Advantages of Owning Multiple Units While owning multiple units requires a certain skill set and a significant amount of capital, there are also some significant benefits to owning more than

There is only so far they can move up the chain before they hit a roadblock. For instance, imagine you have an employee who wants to someday be the head manager of a store.

Therefore, you ll eventually lose this fantastic employee because they won t be able to fulfill their career goals at your store.

5 Three Advantages of Owning Multiple Units While owning multiple units requires a certain skill set and a significant amount of capital, there are also some significant benefits to owning more than one store. Below are the top three advantages of owning multiple franchise units. 1 When you own one store, the opportunities for your employees to advance are limited. There is only so far they can move up the chain before they hit a roadblock. For instance, imagine you have an employee who wants to someday be the head manager of a store. However, you already have a head manager who you can trust and rely on. You re not going to replace this manager just because another employee might have the potential to be a great manager. Therefore, you ll eventually lose this fantastic employee because they won t be able to fulfill their career goals at your store. Yet, there are opportunities for advancement when you own multiple stores. If an employee shows potential in one store, you can make them a manager at one of your other locations. When employees can see that they always have opportunities to move up the chain, employee loyalty increases and employee turnover decreases. 2 3 The third advantage to owning multiple stores is that you have diversification. While all of your stores may belong to the same franchise, they won t be exactly alike. For example, one of your stores may have a phenomenal location while another has a dynamic manager. Since there is variation between each store, some will do better than others. Moreover, the stores that are high performers can change from year to year. By owning multiple units, you spread some of the risk across all of your units. If one of your stores suffers from a dry spell, one your other stores can make up for it until the other store recovers. By spreading the risk across all of your stores, the average of your stores is what truly determines your success. In summary, remember that there are advantages to owning multiple units to help compensate for some of the challenges. The second advantage of owning multiple units is that you can share resources. For example, if you own a few Hot Dog on a Sticks and one of them runs out of hot dog buns, you can simply stop by one of your other stores and pick up some of their hot dog buns. This will help the overwhelmed store make due until the next delivery and you never miss an opportunity to make a sale due to lack of product. In addition, you can build distribution chains that hit all of your stores. For instance, you can schedule your vendors to drop off supplies to each of your stores one right after the other. Furthermore, you may be able to ask these vendors for a discount since you re providing them with more business than the typical customer. HOT DOG ON A STICK 5

You now know the skills you ll need, the financial resources available to you, and the advantages to owning multiple units.

So, which franchise is phenomenal at supporting its multi-unit franchisees? Hot Dog on a Stick, of course! At Hot Dog on a Stick, we re dedicated to supporting our multi-unit franchise owners.

If you re ready take on this exciting opportunity, call Hot Dog on a Stick today! All materials have been prepared for general information purposes only to permit you to learn more about the FDD.

The information presented is a summary of the disclosures required by the Federal Trade Commission. The terms of your contract will govern your franchise relationship.

6 You now know the skills you ll need, the financial resources available to you, and the advantages to owning multiple units. If you re ready to own multiple franchise units, the next step is to find a franchise you love and that will support you as a multi-unit owner. So, which franchise is phenomenal at supporting its multi-unit franchisees? Hot Dog on a Stick, of course! At Hot Dog on a Stick, we re dedicated to supporting our multi-unit franchise owners. We want you to succeed and see your business empire expand. With over 92 stores across the country, we understand the unique challenges you ll face as a multi-unit owner. If you re ready take on this exciting opportunity, call Hot Dog on a Stick today! All materials have been prepared for general information purposes only to permit you to learn more about the FDD. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice. The information presented is a summary of the disclosures required by the Federal Trade Commission. The terms of your contract will govern your franchise relationship. Don t rely on the disclosure document alone to understand your contract. Read your entire contract carefully. Show your contract and the FDD to an advisor, like a lawyer or an accountant. This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If you are a resident of or want to locate a franchise in one of these states, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your state. Franchise offerings are made by the Franchise Disclosure Document only. For New York: This advertisement is not an offering. An offering can only be made by a prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. For Minnesota: MN File No. F Glenridge Connector, Suite 850, Atlanta GA franchiseinfo@gfgmanagement.com

Prepared by: HOW MUCH DOES IT COST. TO OPEN A FRANCHISE? (and Seven Other Essential Answers to Know Before You Invest)

Prepared by: HOW MUCH DOES IT COST TO OPEN A FRANCHISE? (and Seven Other Essential Answers to Know Before You Invest) A 2017 Guide to Opening a Pretzelmaker Franchise So you re thinking about investing