MUOs Continue Growing: Expansion is the keyword for multi-unit franchisees

Once upon a time a person could “buy” a job as a franchisee. This choice was characterized by hard work and hands-on management of a single location. The past two decades have seen a significant shift to multi-unit franchising, and it is this group of entrepreneurs who now make up the majority of franchisees in the marketplace.

Franchise Update Media has been following this trend since it began. In 2004 we launched Area Developer magazine, soon renaming it Multi-Unit Franchisee magazine to expand our coverage of the evolving forms of multi-unit ownership. In the ensuing years, as we strove to serve this new and expanding breed of entrepreneurs and educate them on this growing phenomenon, we were learning too. 

In the inaugural issue of the magazine, former stockbroker John Prince opened up about how he had become a multi-brand operator with Applebee’s, Aaron’s, Famous Dave’s, and Hooters. He told us that the cash flow from his restaurants covered the locked-in inventory cost of his Aaron’s rental stores. Then we discovered Jim Gendreau, another multi-unit pioneer, in his case a serial franchisee for several brands, including dozens of Cost Cutters. And Tom Larson, a lodging and restaurant operator with 7 brands, which at the time we thought was phenomenal. We asked, How did they do it?

Since then, we’ve profiled and interviewed hundreds of multi-unit operators, spoken with specialists and experts on every aspect of the business, and tallied numbers, stats, lists, and rankings highlighting the rapid growth of these operators and their organizations—not only of their growing numbers, but also of their professionalism, passion, determination, generosity, and community involvement.

Next we launched the annual Multi-Unit Franchising Conference (MUFC), which has grown from a few dozen attendees at the start into a major event attracting nearly 2,000. To meet the growing needs of this emerging juggernaut, we added digital content that today includes an information-packed website and online newsletters and resources, documenting the growth and serving the needs of the expanding ranks of multi-unit and multi-brand franchisees across the U.S. and across the world.

It’s unlikely this business shift would have occurred without franchisors also recognizing the trend and altering how they think about multi-unit franchisees. Once fearful of allowing any franchisee group to grow too large, they soon recognized the power of partnering with the right operators—those interested in growing the brand together with them. Franchisors adapted, changing how they marketed and recruited franchisees, and revising their FDDs and processes to accommodate this new way of franchising. Today it’s not uncommon to hear of multi-unit deals in excess of 50 or 100 units, and 3-packs or 5-packs standard offerings at many brands.

We’ve found multi-unit franchisees to be as friendly and approachable as they are smart and savvy. They will speak at length about how they have achieved success, and freely provide advice on how others also can succeed. In fact, the best of them want others to succeed as they have, and have baked a career path opportunity into their plans for every new hire. And at the MUFC, they share freely, whether on stage, on a panel, or in the hallways informally, offering insights to others interested in following the same path. 

Once again, we’ve freshened up this edition of the Multi-Unit Buyer’s Guide. It remains an essential resource for connecting expansion-minded multi-unit operators with like-minded franchisors. In the following pages you’ll find information direct from franchisors to help you evaluate new opportunities to diversify your portfolio of franchise brands and grow your organization.

These franchisors understand—and are actively seeking to connect with—successful multi-unit franchisees to help them penetrate new markets, a perfect win-win for operators seeking the best brands to invest in. We hope this guide helps all involved. You just might discover new and prosperous partnerships in these pages.