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Franchise Advice


poor management will have a profound effect on the franchisee’s business. After all, a multi- unit franchisee cannot be ‘behind the counter’ of more than one franchised unit at the same time and so becomes reliant on their managers for the performance of their other outlets. For example, a manager will be anxious to go home at closing time, whereas the franchisee will serve their customers for as long as necessary and will close up when the last customer has left. Secondly, multi-unit franchisees should not let themselves be lulled into a false sense of security by what they see happening in the US, where multi-unit franchisees are commonplace and where the size of their businesses gives them leverage (and the ability to litigate) against their franchisors. Some have scored notable successes, but in a more litigious society this is


only to be expected, whereas going to court in the UK can be ruinous. In the circumstances, therefore, a multi-unit franchisee should not think that their size will provide them with a stick with which to beat their franchisor. That said, there is no doubt that a franchisor will be more conciliatory towards a multi-unit franchisee than would otherwise be the case. Where a franchisor encourages its franchisees


to open more units, a prospective multi-unit franchisee should look to the strength of their franchisor when planning a strategy for opening more franchised outlets. It is crucial for them to feel satisfied that their franchisor has geared up its management and administration to meet the demands of its multi-unit franchisees’ growing and more sophisticated business operations.


Would-be multi-unit franchisees need to


assess very carefully the quality, propensity to innovate and strength of their franchisor. They need to access the future market trends for the brand and for the products or services being sold, as well as the strength of the brand they are investing in. They need to ask themselves how much of their future financial welfare they may be risking by putting all their eggs in one basket instead of diversifying. There is no doubt that being a multi-unit


franchisee can almost certainly catapult you as a business owner into a different league, in terms of the number of outlets operating under your ownership. Such a business strategy, however, needs to always be carefully planned and efficiently executed if it is to be successful in the long term. n


Manzoor has specialised in franchising for more than 40 years and is a former member of the Legal Committee of the British Franchise Association. He is co-author of ‘Franchising in the UK’ and ‘Franchising in Europe’.


114 | The Franchise Magazine 2018


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