Breaking the Four Great Myths of Multi-Unit Franchising. Myth #1: The Hardest Part is Getting the Financing

For franchisors and franchisees alike, growing through multi-unit ownership seems like a “no-brainer”. Today’s great operators know how to be successful in the model. Why not expand their reach to more units or territories and we’ll grow together? Before you go down that road, be wary of the four great myths of multi-unit franchising. Here is the first:

Myth #1 – The Hardest Part is Getting The Financing

Clearly, the expanding business needs a business plan that demonstrates where the money will come from and how it will be paid back. It’s the roadmap to building business value. A well-constructed plan details the sources of cash flow (cash reserves or a credit line) dedicated to the new territory.

Many expansions have failed because owners robbed the cash flow and financial capacity of their first location to support the start-up losses of the second. This can put the entire enterprise in financial distress. This can be avoided with a solid cash flow and financing plan.?Getting the necessary financing is essential, but it is not difficult to accomplish with a track record of profitability from location #1 and a solid business plan for locations 2+.

No, getting the financing is not the hard part. Giving up control of operations – a necessary step in enterprise development – can be the biggest hurdle to successful multi-unit expansion. Micro-managing operations of multiple locations doesn’t work, no matter how much financing you have.

Which brings us to Myth #2 – The Best Franchise Operators Make the Best Multi-Unit Owners

Do you have the competencies, capacity, and capital required for reliable multi-unit expansion? Join us Sunday, February 26 at our IFA 2023 Convention Special Session, Profitable Growth Through Multi-Unit Expansion. Click here for more info/registration. #IFA2023 #MultiUnit #Franchise #Franchising #ProfitSoup #BarbaraNuss #RodBristol #Profit #ProfitableGrowth