Stairway to Multi-Unit Heaven

"All that glitters is gold". Led Zeppelin fans will recognise this as the second line in Stairway to Heaven. However, a single unit franchisee that glitters is not necessarily a golden multi-unit franchisee, as you'll see in the 20 Steps to Multi-Unit Heaven below.

These 20 Steps were part of a webinar I recently delivered with Jason Travis on Strategies and Tools for Multi-Unit Success. While they are particularly relevant to franchisors with multi-unit franchisees, or multi-unit franchisees themselves, there's some gold in here for everyone.

1. Create measurable expandability criteria. These are the capabilities and resources that will make a difference to future performance. Clear expandability criteria enable you to objectively rate someone's readiness to proceed and succeed.

2. Make expandability criteria transparent. This means everyone has a shared understanding of what excellence looks like. Good operators will want to know this and it will motivate them to do and be better.

3. Don't say "no" say "not yet". By rating franchisees, you will inevitably expose gaps which may or may not be easily rectified. If rated as "not ready", coach them on how to close these gaps and encourage them to apply again.

4. Involve key executives in the assessment process. Growing a network from within impacts on many support office functions. Ensure the people that have a stake in multi-unit expansion are consulted for their expertise and support.

5. Use regular reviews to identify expandability potential. Even if a franchisee doesn't yet want to expand, regularly reviewing their performance and potential will still help them to run a better business, a win for everyone.

6. Pro-actively scout for talent. Use reviews and performance data to identify which franchisees should be encouraged to expand. Also listen for messages by franchisees who want to grow and offer extra units as a possible strategy.

7. Have a clear rectification process for problems. Before granting multi-unit operations, be clear on your red flag warning signs, and be ready to quickly instigate remedies before a symptom turns into a serious problem.

8. Encourage franchisees to hold up a mirror to themselves. Self awareness, especially of one's strengths and weaknesses, is important for success in a growing business. As Uncle Ben told Spiderman, "with great power comes great responsibility".

9. Help franchisees understand what will change. Carolyn MacManus, who owns eight successful franchised restaurants, believes everything changes when you expand from two to three units. "You are moving from a supervisor to a CEO", she says.

10. Secure access to financial information. Because the stakes are now higher for all parties, many franchisors negotiate a tripartite agreement with banks so they can gain access to important financial data if things start to go amiss.

11. Be clear on legal and management structures. Many multi-unit operations are partnerships or joint ventures where several parties are sharing the risks and responsibilities. Franchisors need to know who is responsible and liable for what.

12. Ensure robust partnership agreements. Partners often find it harder to work together than they thought. Difficulties for all parties can be avoided by including a clear exit plan in the partnership agreement.

13. Cater to the needs of multi-unit operators. Many of our clients schedule multi-unit breakout sessions at their annual conferences so larger operators can discuss strategic and structural issues more relevant to their businesses.

14. Adjust support systems to be multi-friendly. Multi-unit franchisees like to compare performance across units. Having to use information systems designed for single unit operations is understandably inefficient and frustrating.

15. Provide a pathway to build capability. As franchisees move into multi-unit operations they will appreciate opportunities to develop higher level leadership skills. Targeted training programs can be a worthwhile investment.

16. Encourage the use of performance groups. These are facilitated small groups where data, goals and plans are shared, and franchisees hold each other accountable. They can also be used for store managers within multi-unit operations.

17. Draw on existing experience. Multi-unit franchisees often make competent and willing mentors for franchisees wanting to grow. They will also have valuable input for special projects and information sharing panels.

18. Be prepared for strong feedback. Multi-unit franchisees have higher expectations and tend to be more direct and challenging with their feedback. This can be useful for franchisors if given and received in the right spirit.

19. Be flexible with field support. Field managers face unique challenges in supporting multi-unit franchisees. For instance a franchisee might expect higher level advice or be hard to contact. You may need to negotiate an approach that suits all parties.

20. Use expansion for reward and recognition. Natallie Dalbo, General Manager Operations for 7-Eleven, believes their multi-unit program is the ultimate loyalty program for rewarding quality franchisees who are keen to grow. I tend to agree.

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