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 is focused on the franchise opportunity as a vehicle to build wealth. 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. He probably would be drawn to a turnkey franchise opportunity 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 is interested in making money, and he wants to know how much he can make 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. So, where Ivan would pay a $30,000 franchise fee for one location, he may be incentivized to build three locations if the franchise fee is reduced to $25,000 each.
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 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
If you’re interested in learning more about Ivan and how to recruit him to be your franchise’s next multi-unit owner, we’d love to discuss our approach to persona marketing with you! Stop by our booth at the Franchise Leadership & Development Conference, scheduled for Oct. 19-21 in Atlanta. We hope to see you soon!