It’s not a new topic; multi-unit franchising has made news headlines across various business publications since the mid to late-1980’s, as the concept began to gain popularity among successful business owners and entrepreneurs, looking to expand their portfolios. So, what’s new?
Why Is Multi-Unit Franchising Such an Important Topic Right Now?
It’s not a new topic; multi-unit franchising has made news headlines across various business publications since the mid to late-1980’s, as the concept began to gain popularity among successful business owners and entrepreneurs, looking to expand their portfolios. So, what’s new? The booming profitability in the service brands’ franchising world. Regardless of the saddening losses and drastic changes wrought by the COVID pandemic, franchising is thriving. Authority Brands, a parent company of several home service companies, has seen steady growth to its network of more than 1,100 franchise owners, with a total of more than 2,300 territories across the US and Canada. More than ever, locally-owned businesses whose teams can be trusted in people’s homes are in demand, giving those currently in this line of work or those looking to enter it, a chance to ‘double-down’ and grow their footprint by purchasing multi-unit franchises.
How does multi-brand support tie into the concept of multi-unit franchising?
The growth opportunity doesn’t stop at a brand’s border. Several franchise owners currently operating a trade brands business (plumbing, electrical, HVAC, property damage restoration and screen repair and replacement service for homes and businesses) are considering the possibility of increasing their revenue by opening a brand within the same Authority Brands umbrella. Some individuals who have expressed interest in expanding are already multi-unit owners for a single brand. In fact, this month, an owner in Tennessee who currently runs a Benjamin Franklin Plumbing, Mister Sparky, and One Hour Heating & Air Conditioning businesses in her market is adding a new DRYmedic Restoration to her location. The natural ability to share leads—cutting down marketing costs and growing customer lifespans for businesses—is second to none. And that possibility expands across any of the Authority Brands companies. There are currently more than 460 multi-unit franchise owners, and more than 50 owners holding more than one brand. It’s a huge focus for Authority Brands Chief Growth Officer Heather McLeod.
“Multi-brand owners add tremendous value to our organization because they can identify synergies at a deeper level than we can sometimes at the corporate office,” said McLeod. “They’re inherently better at finding more organic ways to cross sell and refer customers across their unique brands – and some of their best practices have become the standard across our brands.”
How are we uniquely supporting our existing multi-unit owners?
A sea of logistical questions emerges when one considers serving multiple franchised territories. They are present no matter if an existing franchise owner seeks to add additional units, or a new candidate enters a franchise system wishing to open multiple units.
DBA Assignments
DBA assignment is often a gray area shared between the franchise development, brand operations, and marketing teams. With today’s ever-changing Google algorithms, the challenge to be as widely geographically descriptive as possible for a Google Business Profile (GBP), while respecting available whitespace yet to be sold, is tricky to say the least. This process becomes even trickier when an owner is adding an adjoining unit to their existing business or opening multiple units simultaneously. To aid in this process, some are adopting an “if, then…” system which spells out as many of the variables as possible in advance. This includes the franchise owner’s DBA preference and the internet vendor’s recommendations before any assignment is made.
Resource Accounts
More and more, franchisors are looking to online or cloud-based “toolboxes” to help owners customize marketing assets that are pre-approved for consistent branding across the franchise system. The benefits of having marketing options at your fingertips 24/7 are key for busy multi-unit owners. Being able to quickly get resources while juggling various territory-specific needs is a game-changer. Careful thought must be put into who will be managing these locations, and how these decisions can help simplify additions of more potential units in the future.
Operational Logistics
From an operational standpoint, supporting multi-unit owners requires attention to detail and close partnership with brand Operations leadership, and Franchise Business Coaches (FBC), in areas as obvious as budget and P&L review, to selecting preferred customer relationship management (CRM) software and training programs for owners. As the number of locations under one owner increases, so do the logistics and details to be managed to ensure quality work that maintains a high profit margin. At DRYmedic, for example, the Operations team puts a heavy focus on using technology to improve project management, customer experience, and job profitability. But the priority they teach new owners, is ‘people first’ – building their team’s culture.
“Build your culture; we are all technicians first,” said Carlos Hasano, president of DRYmedic Restoration. “Being able to identify issues for your team and find solutions, allows you to effectively train the people coming in the door, show them the pathways to grow, encourage them, and reward them based on their performance.”
What are the biggest challenges we see with multi-unit ownership?
Recruitment, staffing, and recruitment again. Business owners in many industries nationwide have been vocal about their experiences with the current U.S. staffing shortage. Competition for skilled labor is fierce, and as a location adds units, its staffing needs grow exponentially. Authority Brands has seen successful implementation of recruitment vendors integrated into multi-unit owner websites, making instant job search and application possible, across desktop or mobile platforms.
Keeping jobs flowing in the door to make payroll for the team can be scary for those thinking of adding units, especially with rumors of a looming recession. One thing to consider before investing in additional franchise units is, “Will this business be in-demand even in a fluctuating economy? If consumers limit their spending, will this be the service they cut first?” As Mark Dawson, an executive vice president for Authority Brands told owners in November 2022 at their annual convention, “We refuse to participate in a recession.” Investing in essential services is a sound investment, and benefits are simply multiplied when adding multiple units.
Megan Boyd, Marketing and Communications Manager, Authority Brands
