Generally speaking, investing in a franchise offers a faster route to potential growth and expansion when compared to starting a new business from scratch. That’s the simple reality of being able to sell established products or services on your very first day in business.
Some investors have the financial heft to enjoy the benefits of multi-unit franchise ownership right out of the gate. In some cases, these investors have limited or possibly no exposure to the day-to-day workings of the franchises they own, having delegated those responsibilities to others.
For most people, however, owning and operating more than one location of a franchise is something that takes time to achieve. Beyond the obvious financial barriers, it’s important to learn the ropes of a specific business and get comfortable with the lifestyle and routines of franchise ownership before deciding to double your ownership stake or grow even bigger.
We asked Chati Narayan, The UPS Store’s Director of Franchising, for advice about making the move to multi-unit ownership.
What should be your first consideration when considering multi-unit ownership?
Chati: No consideration is more important than the stability of your financial situation. Ideally, you’ll have a healthy amount of cash in reserve, little to no debt, and reliable revenue from your existing franchise business. Make sure you understand all the associated costs of investing in multiple franchise units before moving forward.
Beyond examining profit and loss figures, this part of your assessment should also include an examination of your personal knowledge and understanding of business finance – be willing to consider upgrading your financial literacy before taking on any new risk.
How important are leadership skills?
Chati: It goes without saying that owning multiple franchises means employing more people. However, the more people you employ, the less time you’re able to spend interacting with each of them individually. Therefore, your leadership of the whole team becomes more important.
Naturally, one way to be a good leader is by employing good people and letting them thrive. No matter how many locations they own, any business owner can appreciate the importance of identifying and hiring quality employees. Especially if you’re considering expanding into multi-unit ownership, it’s smart to hire new staff before you need them, giving potential future managers a chance to learn the ropes before you hand them increased responsibility.
What should I look for in a franchisor?
Chati: Consistency, efficiency, and repeatability are key components of success in most franchise businesses. Make sure you’ve mastered your systems, processes, and procedures at one location before deciding to add more. Consult with your franchisor and, if necessary, consider refresher training or skills upgrading for your existing staff.
Your franchisor should also be willing and able to help with any other issues and challenges related to multi-unit ownership, including supporting ongoing training efforts and providing protocols for daily operations.
What sort of lifestyle changes will multi-unit ownership bring?
Chati: Even with top-notch delegation, increasing your ownership stake is going to mean more work, as well as changes to your daily routine. You’ll be managing more people, possibly making regular visits to new locations, and likely taking on new responsibilities.
Amid all that, it’s essential to maintain focus on what’s most important in life: taking care of yourself and staying connected to friends and family. Make sure you have a system in place to establish a good balance between work and play so you can avoid overwork and burnout. Talk to your partner or family about the change. You’ll want them around to support you when you most need it, and you’ll have to make sure you’re there for them when they need you around.
When it comes to The UPS Store, what are you looking for in multi-unit owners?
Chati: Particularly for MCOs (Multi-Centre Owners), it is important that person understands that they are not just investing in a business, but in a brand. For The UPS Store, this means well-respected, over 100-year-old brand. It is the power of that brand that attracts customers basically from the time the doors of a The UPS Store location first open. An MCO will understand that respecting the brand, and the value proposition it comes with, needs to be reflected within each location within their portfolio.
To do so, it also means that they are utilizing the processes and support systems already in place, rather than inventing tools and processes themselves. By extension, it would also mean they trust their franchisor, in our case The UPS Store Canada, to be working for the benefit of their franchisees.
What is unique about The UPS Store’s multi-unit ownership opportunity?
Chati: What is unique to The UPS Store is that we have a couple of paths to multi-store ownership. A franchisee could elect to own a number of traditional style standalone locations. Alternately, they could commit to our In-Walmart opportunity. For the latter, the opportunity requires that the franchisee commits to five locations as part of the initial franchise agreement. Each path has its own benefits, and suitability for either opportunity really depends on the ability of a franchisee to step away from the counter and juggle the needs of a number of locations.
With The UPS Store’s training and support, our team will guide franchisees through the process of owning and operating multiple locations. Learn more about our franchising opportunities here.
