With multi- and multi-franchising, franchisees don’t just manage one outlet, but several at the same time! It’s a change of posture that requires you to be both a super manager and a true organizational strategist.
Super-franchisees, serial entrepreneurs, “Barons”… Franchisees who manage several sales outlets are increasingly numerous. Today, an estimated 20% of franchisees operate an average of three outlets, compared with 8%* in 2009. There are good reasons for this trend. Cohorts of managers and former shopkeepers, accustomed to managing teams, reconvert to franchising, with the aim of making the most of their experience and running veritable little branded empires.
Among these serial entrepreneurs, we need to distinguish between multi-franchisees and multi-franchisees: the former manage several establishments in the same network, the latter in different networks. “In both cases, they are investors. With franchising, they find a secure means of development”, explains Emmanuel Jury, President of Progressium.
Growing up, yes, but not just any old way
The prospect of managing several franchised outlets is tempting: shared costs, economies of scale, tried-and-tested processes …. But beware! Opening times must be staggered over time. It’s out of the question to open a new outlet every 6 months on the pretext of expanding at all costs. “Rule number 1 is that you need to generate sufficient cash flow before launching another establishment. Especially as a second or third business generally takes longer to get off the ground,” warns Emmanuel Jury. Beyond three or four units, we also need a legal structure. “I set up a financial holding company to oversee the various legal entities. This gives us better visibility of the profitability of each outlet,” explains Florian Louys, a La Chaise Longue franchisee who manages three stores in the South-West of France.
Multi-franchise: the ideal way to diversify your investments
Multi-franchisees must also ensure that the brands they wish to open are compatible, and check in their contract that the franchisor accepts multi-franchising. On this last point, there are two schools of thought: on the one hand, there are the networks that reject outright the fact that their flock is spreading itself too thinly with different and, above all, competing banners; on the other, there are the networks that welcome the formula, particularly in the textile, catering and food sectors. “We have two multi-nationals in the network, both of whom run Subway restaurants or Bistrots Régent. It’s a win-win situation for us, because they have a strong business and franchise culture, without being in the same niche,” says Christophe Miguel, co-founder of the King Marcel burger chain. As far as franchisees are concerned, multi-franchising avoids putting all one’s eggs in one basket, and dilutes financial risks, particularly in the event of a downturn in a sector or an economic crisis.
Streamlined organization and delegation
With mega-development comes mega-organization. “A multi or multi-franchisee is a super manager. Rarely in the field, they must delegate, surrounding themselves with a concrete number 2 in each unit” continues Emmanuel Jury. Some multi- and multi-franchisees manage up to 5 or 6 outlets and the equivalent of 50 people. In this case, you need to be ready to take on the role of business unit manager, or even small SME, and concentrate on reporting on sales outlets, staff turnover, team management… Another job, far removed from operations and customer contact, requiring a strong multi-disciplinary approach.
The distance between sales outlets is also important. Experts also recommend concentrating openings within a geographical perimeter of no more than 100 kilometers. “My stores are located in Saint-Paul de Dax, Bayonne and Tarbes, and it takes me between 30 minutes and 1 hour to reach them by car,” says Florian Louys, who plans to open a fourth Chaise Longue in Bordeaux. The five-year-old is even thinking of diversifying his investment portfolio with another brand, this time in… footwear.
*15th Banque Populaire-FFF survey
