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Are you ready for multi-concept franchising?
Jan 05, 2012
Opening a single franchise unit is often one of the most challenging—and sometimes rewarding—things an entrepreneur can do. Opening multiple units of a franchise is for advanced franchisees only. And opening several franchise units across several different brands? That’s like earning a doctorate in the small-business school of hard knocks.
What’s more, instead of demanding 100-percent brand loyalty, some franchisors are beginning to see value in multi-concept franchisees and actively courting them.
Tess Ngan Tian, president of Lots’A Pizza Franchising Corp. who also owns a couple of Mang Inasal franchised outlets, says there are several advantages to being a multi-unit or multi-concept franchise owner.
For multi-unit franchisees (that is, those that own more than one unit of a single brand), the advantages are “first, the economic aspect: you can divide your costs among your outlets, making you more efficient,” Ngan Tian says. “Second is staffing; because you have a pool of employees, you can move around the crew of your outlets to compensate for those that have absences or shortages.”
Multi-unit franchises can also share their stocks and products and transfer them from one outlet to another. “This way you can spread your stocks so that not all are in one outlet,” she adds. They can also share supervision, training, merchandising expenses and even “the different experiences” gathered from all their outlets, Ngan Tian says.
Owning multiple franchise concepts, on the other hand, allows the franchisee to share experiences with his franchisors and perhaps recommend changes that would make either or both franchise companies more efficient. “It’s like distributing your eggs into different baskets,” says Ngan Tian, “and it allows you to be more flexible in terms of finances and (franchising) knowledge.”
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