There are two distinct types of franchise owners: owner-operators and multi-unit owners. Although some franchise opportunities – especially among service brands – are better suited for owner-operator ownership, multi-unit owners can help you grow your franchise much more quickly.
Multi-unit ownership has grown in recent years, and FRANdata reports that now 54% of all franchises are multi-unit operations. A typical franchise multi-unit owner has five locations, and multi-unit ownership is most prevalent in the restaurant industry.
So, how do you recruit candidates for multi-unit ownership rather than owner-operator types? The difference is in the persona that you target in your marketing.
Meet Ivan the Investor
Let us introduce you to Ivan the Investor, our multi-unit owner persona. Ivan focuses on building wealth through the franchise opportunity. He is educated and well-read. He has worked hard building his career, and now he wants to diversify his portfolio by investing in a new business venture. Turnkey franchise opportunity attract him because he plans to hire a strong team to run the day-to-day operation – or turn over the reins to a business partner.
Ivan is at a place in his career where he desires a better work-life balance. He is comfortable managing his business from a distance and most likely will rely heavily on technology to accomplish his goals both for the business and his personal life.
To get Ivan’s attention, you should emphasize your franchise’s turnkey business model and potential for scalability. You want to use words like “growth” and “scalable,” and you want to talk hard numbers. Ivan has interest in your opportunity’s ROI because he wants to make money with you.
Get Ivan’s Attention
To make your franchise opportunity attractive to Ivan, you are going to have to dangle some financial carrots in front of him. Ivan is going to expect some substantial incentives in exchange for his investment. He is smart enough to realize that a number of franchises would love for him to join their ranks, and so he boldly asks you, “What’s in it for me?”
Different franchise models offer different incentives to multi-unit operators, and the stakes get larger the more locations that investors commit to opening.
Sometimes, brands offer a simple discount on the franchise fee for multiple locations. A reduced franchise fee of $25,000 each incentivizes him to build three locations instead of paying $30,000 for one.
Ivan may also be interested in committing to a bigger investment, like an area development agreement. In an area development agreement, a franchisee commits to building a certain number of locations in exchange for incentives. This is includes incentives like a reduced franchise fee or exclusive territory rights. There are also area developer opportunities in which the developer invests in recruiting other owners to a territory in exchange for a portion of the franchise fee or royalty payments.
We Know Ivan
Do you want to learn more about Ivan and the process of recruiting him into your franchise’s next multi-unit owner? We love discussing our approach to persona marketing with Franchisors like yourself. Stop by our booth at the Franchise Leadership & Development Conference, scheduled for Oct. 19-21 in Atlanta. We hope to see you soon!
