Multi-Unit Franchising Is Booming, According to a New Research Report by Franchise Business Review

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Report Reveals 2015’s Top Multi-Unit Franchise Brands & How Much Money Multi-Unit Franchisees Earn

Multi-unit franchisees, Jonathan Porter (right) and Scott Philips (left), own AdvantaClean of Metro New Orleans.

The median annual pre-tax income of the multi-unit franchisees Franchise Business Review surveyed was $88,000. 29% earned more than $150K and 16% earned over $250K.

As the franchise industry prepares for this week’s Multi-Unit Franchise Conference, Franchise Business Review releases research showing that franchise owners are increasingly buying up multiple franchise locations or territories, often not of the same brand.

The report looks at the satisfaction of over 6,000 multi-unit franchisees from more than 300 leading franchise companies to determine which brands have the most satisfied multi-unit operators. Franchisors told Franchise Business Review researchers they are seeing more interest in multi-unit ownership from prospective franchisees than ever before.

“Multi-unit ownership’s growing appeal is the result of two factors,” says Michelle Rowan, president of Franchise Business Review. “Franchisees enter into it due to the potential for increased profitability. Franchisors are encouraging it because well-financed and experienced franchisees can expedite growth, while keeping the number of franchisees they work with manageable.” The median annual pre-tax income of the multi-unit franchisees Franchise Business Review surveyed was $88,000. 29% earned more than $150K and 16% earned over $250K. By contrast, 11% of single-unit franchise owners earn more than $150K and only 4% earn over $250K.

Since a multi-unit investment is significant, it is crucial that prospective franchisees who are considering it do extensive due diligence to determine if a brand can properly support them and if the culture is the right fit. Franchise Business Review’s report looks closely at the factors that make a brand a good choice for multi-unit ownership. The list of top franchise brands for multi-unit operators within it, 50 in all, includes Better Homes and Gardens Real Estate, Snap-on Tools, Crunch Fitness, CertaPro Painters and Johnny Rockets. The full report is available for free at http://www.FranchiseBusinessReview.com.

The variety of franchise brands on this year’s list indicates that multi-unit franchising, which used to be dominated by food brands, is now popular with all types of concepts due to the many benefits it offers. These include efficiency of scale, market domination, improved employee training and profit balancing, all of which are looked at in detail within Franchise Business Review’s report.

Multi-unit franchising is not for everyone. To help potential franchisees determine if they are the right fit for it, Franchise Business Review partnered with Zoracle Profiles, which utilizes a science-based, market validated and franchise specific profiling system, to determine the “Top 12 Traits of Multi-Unit Franchise Owners”. They include being very self-aware, adaptable and innovative, self-motivated, responsible, societally conscious and trend adverse. Details regarding all twelve traits, as well as additional information about what a typical multi-unit franchisee looks like are revealed in the report. Below are a few facts about multi-unit franchisees that Franchise Business Review’s research uncovered.

  • median age: 49 years old; 30% are 55+
  • college degree: 80% have a college degree; 23% have an advanced degree (masters/doctorate)
  • male vs. female ownership: 73% male, 17% female, 10% male/female partnerships
  • years in franchising: 18% less than 2 years in biz; 46% less than 6 years; 32% more than 10 years
  • own 5+ units: 39%
  • areas that multi-unit operators rank their franchisors highest in terms of satisfaction: current financial performance (+10% over benchmark); feel valued as a member of the organization (+8% over benchmark); feel they are actively involved as a franchisee (+8% over benchmark); overall satisfaction (+5% over benchmark)
  • area that multi-unit operators rank their franchisors lowest in terms of satisfaction: effective use of technology (-8% below benchmark)

To compile the data for this year’s Top 50 Multi-Unit Franchises report, Franchise Business Review invited all North America-based franchise companies to participate in a free franchisee satisfaction study. All active franchisees within the participating systems were given the opportunity to answer questions ranking their franchise in the areas of financial opportunity, training and support, leadership, operations and product development, core values (e.g., honesty and integrity of franchisor), general satisfaction, and the franchisee community. Data from franchisees who own three or more units within the same brand was analyzed to form the basis of Franchise Business Review’s report since the majority of franchisees' operations and support needs do not change until they reach three+ units. Once they do, franchisees must change their mindset to working on, rather than in, their business.

About Franchise Business Review:

Franchise Business Review is a national franchise market research firm that performs independent surveys of franchisee satisfaction and franchise buyer experiences. In addition, it provides services for franchisors and multi-unit franchisees including qualified lead generation, custom franchisee and employee satisfaction surveys, and customer satisfaction programs. Franchise Business Review is headquartered in Portsmouth, NH, and can be reached at (603) 433-2270. Visit http://www.FranchiseBusinessReview.com for information.

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Emma Pearson