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Which Franchise Model Appeals to You?
When you think about owning a franchise, you really mean owning one and operating it, don’t you? Or do you mean owning and operating multiple units, and possibly multiple concepts?
Whichever way you’re thinking, franchising can work for you, but here are some points to ponder about each model.
The single-unit owner operator
- You’re in it up to your elbows. In other words, you’re the boss. The franchisor trains you to start-up and operate the franchise, everything from A to Z. Your accountability is always on the line. And you love it!
- That’s you behind the counter. There may not be a counter, or even a storefront with your franchise, but you’re in the picture because you want to be. You may be driving the truck, or working out of the office, or calling on customers. You love the front line!
- You make all the decisions. At least all the decisions that the franchisor says must be made by the owner or operator. You may be the person who orders inventory, interviews and hires employees, trains and motivates employees, fires employees, places advertising, works with suppliers, collects money, pays the bills, etc. Of course, you can hire people to do many of these jobs for you, and the franchisor will show you how and when to do so, but you don’t mind keeping a dozen balls in the air at one time.
- It’s always all on you. The franchisor says the store will be open on Christmas Day. Could be a workday for you. Someone doesn’t show up on Saturday morning, when you wanted to play tennis – sorry, you’re needed at the store. And you don’t mind! After all, you’re working for yourself now.
- You’re business is all in one. Whether you go to the customers, or they come to you, everything revolves around your one location. If it doesn’t happen here, it doesn’t happen. Again, that suits you just fine. You like familiarity.
So far so good? This could be the perfect model for you. You work directly with the franchisor, you’re the boss, you’re totally accountable, and you either make it, or (gasp) you lose your investment.
The multi-unit/concept owner
Almost every point above also relates to the multi-unit or multi-concept owner. The pressure is more intense in this model, but there’s less emphasis on store operations. Nonetheless, you’re operating at a higher level.
- You’re not a single store operator. You can’t make all the decisions, and you must rely on a team of people because your business is not all-inclusive. You own multiple units, but you rarely step into any of the units. Other people are making front line decisions for you, and that’s just the way you want it!
- You’ve got a direct line to the franchisor. You’re risking more than the single-unit owner/operator. Your problems are more complex and costly. Even if you could operate one unit with your eyes closed, you can’t now, and you wouldn’t want to.
- You’ve got a direct line to your team. Working in a store, or meeting with customers, is not what you’re cut out to do. You prefer setting the company’s goals and managing a team to fulfill the goals. You’re the leader of the pack, and that’s what you do best!
- Your mind never stops thinking about the possibilities. You’ve got six stores, but you want 600! How do you raise the money? Where do you find the locations? How do you add new concepts? How do you hire the right people? You go to sleep at night loving those challenges.
- You are accountable to other people. Multi-unit and multi-concept owners/operators usually rely on partners, bankers, leasing companies, and others who have a stake in the business. These folks expect you to be accountable and transparent. Not a problem for you, because that’s the kind of business you’ve dreamed about!
If this is the model you prefer, the good news is that franchisors are looking for you today. While many franchise companies are built around single-unit owner/operators, more franchisors are moving to the multi-unit and multi-concept model.
Ultimately, which model you choose depends on your interests and skills, and then finding a compatible franchisor.
There’s one other model to consider: the absentee owner. We’ll tell you more about that model in a future blog.