Differences between a Single-Unit and Multi-Unit Franchise Owner

If you are interested in becoming a franchise owner, you may be able to choose between a single-unit and a multi-unit franchise arrangement. With a single unit, you will have one store that you are the owner of. With a multi-unit arrangement, you will actually be in charge of several stores in your area. Both of these arrangements have some advantages and disadvantages associated with them. Here are a few things to consider about the differences between single-unit and multi-unit franchises.

Single Units

With this type of arrangement, you will be in charge of only a single location for the franchise company. You will pay a fee to get started, and the franchise will provide you with support and training. You will open your one business and will then oversee the day-to-day operations of it. This is typically the most common arrangement for individual entrepreneurs that want to get started in business. With a single unit, you can get involved for a much smaller initial investment. Instead of hiring a large staff to run everything for you, you will most likely manage the store yourself. By doing this, you can cut back on overhead and increase your initial profitability. This arrangement will be much simpler for a new entrepreneur. With this type of arrangement, you will generally have a certain geographical area reserved for you. If you own a single unit and you are in a large metropolitan location, you will most likely not have full access to the entire city.

Multi-Unit 

With a multi-unit franchise, you will own several stores in your area. With this type of arrangement, you may be given a large geographical region to take care of. This will allow you to open multiple locations in this region. This type of franchising requires a much larger initial investment on your behalf. In order to get involved with this type of franchising, you will most likely need access to business financing. 

Even though the initial investment and ongoing costs are much larger with this type of franchising, your chances of success are also much better. When you have access to an entire region, you can make sure that you have access to all of the customers in your area. By increasing your locations, you will be able to increase profitability and your odds of success.

Multi-Unit Franchise Options

When it comes to signing an agreement for a multi-unit franchise, there are two ways that the arrangement could be set up. One type of contract that you could sign is an area development agreement. This is a contract that will require you to open a certain number of locations within a specific amount of time. 

Another arrangement that you could agree to is a sequential contract. This type of arrangement allows you to ease into the market and build up locations as you can afford to do so. 

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