Franchising offers noteworthy benefits to both the franchisor and the franchisee. If you want to start a company under an established business name, using its products, knowledge and branding, consider this option. You may start with one location, but after gaining adequate profits and learning more about the business, you may consider multi-unit franchise ownership.
The following are four benefits of buying more franchise units.
More customers
A single unit can help you reach out to the customers around the location. Buying more franchise units may allow you to get customers from all over the territory.
Higher profits
When the number of customers increases, sales will also increase. Thus, with multiple units, you have a chance of getting higher profits.
Cost reduction
Due to the high demand, you will need more products and equipment from suppliers, which, in some cases can be purchased in bulk at negotiated prices. Furthermore, your franchisor may charge you lower royalties when you attain a certain level of revenue. This is based on all units, making it easier to achieve it.
Some franchisees avoid buying more units because they believe costs will increase. However, in most cases, costs reduce as explained above or remain the same, for example, marketing a single unit on television, radio or online platforms may cost the same as marketing multiple units in the same area.
More career opportunities
Having multiple locations means hiring more employees. When an organization is larger, career opportunities increase. Thus, people from the region and outside can get employment from the different franchise units.
Buying more franchise units can increase your earning potential, reduce costs and create career opportunities. However, you should review the agreements carefully to protect your interests and rights.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.