Franchise Update Magazine Issue III, 2012 | Page 48

Grow Market Lead
46

Sales
smarts
By Marc Kiekenapp

Thinking Multi-Unit
Crafting an effective sales plan

M

ost franchise systems organically grow a singleunit owner into their first
multi-unit owner without
having proper systems or training in place
for multi-unit operators. They are (or become) reactive, rather than starting out of
the gate with a multi-unit strategy. This
is an organic growth curve that occurs in
most franchise systems, as long as its unit
economics are strong and the concept can
operate through qualified managers. Reactive growth needs to be managed early
in the lifecycle of your franchise system.
Single-unit franchise systems with
hands-on operators who do very well
with one location, however, will have a
struggle with expansion. In a majority of
these cases, the franchisee and franchisor
will see reduced sales in the original unit
because they are not prepared to operate
through managers. And, with expansion
capital at a premium in most cases, reducing the operating capital of Unit 1 to
open Unit 2 will be a challenge for both
franchisee and franchisor. Here are five
critical questions to ask yourself:
1) Is my franchise concept the right
model for multi-unit ownership?
2) Do I have systems in place to support multi-unit owners?
3) Have I operated multiple companyowned units as a franchisor?
4) Is my FDD prepared correctly to
offer multi-unit and area development?
5) Am I willing to commit the resources
for this type of expansion?
As stated earlier, early multi-unit owners
at most franchise concepts were singleunit owners who succeeded with their
original unit and expanded. When this
growth starts occurring in your system,
it is a good indicator that your brand has
the potential for multi-unit expansion.
Once you’ve committed to grow the
system through multi-unit expansion, you
have a “game plan” that is proactive. Once
Franchiseupdate Iss u e III, 2 0 1 2

you’ve re-engineered your operating, support, and training programs, you can start
creating profiles and qualification systems
to attract the right multi-unit owners for
your brand. In several cases, the POS
system will not integrate with multiple
stores and does not have the capacity to
handle the reporting needed for efficient
operations. Once you’ve confirmed you
have the resources and systems in place,
the next step is to disclose those new systems in your FDD—not write an FDD
and make the system fit it.
1) Preparing and launching a multiunit program. Your FDD is the starting
point and roadmap that will guide your
program. Since qualified, experienced
multi-unit operators want to be able to
discover key facts quickly, and either engage or move on to another concept, your
FDD becomes one of your primary sales
tools and information centers for them.
Most multi-unit candidates will research
concepts much differently than single-unit
candidates, and most likely will not follow
the sales processes you’ve used in the past.
Generally, after initial conversations,
they will request a current FDD. But because the sales process is completely different for experienced franchise buyers,
the FDD must be buttoned up tightly so
they can gather information quickly and
discover the multi-unit benefits you’ve
added—and see that you understand and
are committed to multi-unit owners and
expansion.
2) Franchise development marketing. It’s likely your company website,
brochures, and communications with
candidates are created to attract singleunit owners. Making changes to attract
multi-unit operators is a critical step that
some franchise companies do not want to
take because of the cost, or because they
are concerned about losing the candidates
they are currently attracting. To work with
multi-unit owners, it is imperative to cre-

ate the proper materials and systems or
all your investment in changes will not
be portrayed correctly. You have to talk
the talk and walk the walk! Connecting
the dots from the FDD to the execution
of documents is critical.
3) Profile the best multi-unit owners you can. Understanding the profile
of your successful multi-unit candidate
is a key to success. Selling to unqualified multi-unit owners who fail or don’t
open the required stores will only squelch
your development efforts down the road
because of the resulting challenges and
validation calls with the wrong owners.
Don’t compromise in this area. This is
the foundation of the plan that will move
your system forward.
4) Finding the right candidates. Multiunit marketing is a science, not a mass
marketing effort. Once you’ve identified
the profile of the right candidate for your
system and the markets to develop, you are
ready to assemble a ma &