(Part 1 of the Multi-Unit Franchising Conference 2023)

Every year, The American Franchise Academy, and myself, participate in the Multi-Unit Franchising Conference, an event that focused on the development, growth, and support of franchisees that are multi-unit or that want to grow their organization with either more units or more brands. 

• In the following weeks, I’ll share the content of some of the sessions that I participated in, around knowledge, best practices, and valuable information for the franchisees’ success. 

To kick off this series, I’ll start with one of the best sessions of the whole conference, a panel called “Growth Strategies for Choosing a New Brand”, with four very experienced, very knowledgeable, multi-unit multi-brand leaders: 

• Gary Robin, a multi-unit multi-brand franchisee from Supercuts and Ideal Image.
• Robert Branca, the largest Dunkin’ Donuts franchisee with more than 200 units. He also owns...

Even though the franchise model has been around for over 150 years, there's still a lot of confusion about what is a franchise and how to accurately explain how this business model works. 

In this blog post, we’ll go over what is a franchise, a review of the history of this model, and what they offer to entrepreneurs and aspiring business owners. 

Whether you’ve been around the franchise model for a significant amount of time, or you are new in the industry and want to learn more, this information will help you better understand the benefits of franchising, make the most of your franchise investment, and run a successful franchise unit or multi-unit enterprise.

The history of franchising

Pre-1800

To talk about the history of franchising, we have to go back to the 1800s. That's right! Back then, kings, queens, and local governments would give high church officials or high-class individuals the right to hold a market and do business in their territories in...

 We are in business to make money. That’s why aspiring business owners decide to jump into the journey of entrepreneurship, franchise ownership, and business management. 

As we grow, we hire leaders to take over and manage our business, with unit managers to supervise our stores and, when we go multi-unit, we hire district managers to oversee the district so that we can have true time and financial freedom. 

Of course, we expect them to manage our business as we would, and also, their commitment and focus on maximizing profitability in every unit and district. But for them to be successful and fulfill your expectations, they need to have access to key information.

This leads to questions like:

• How much information should you give?
• What type of data do they require to produce the results you expect?
• What’s the best way to provide this so that they can make the best possible use of it?

Providing the information for the sake of it is not enough. There has...

People often ask me what is the best franchise in the industry, how to discover which one is better for them, and which one should they buy. The answer to all of these questions can be very tricky because there are many different things that you need to look at to decide which franchise brand is the right franchise for you. 

There are many things that you need to consider when choosing a franchise. Even though here at The American Franchise Academy do not recommend any specific franchise, or sell franchises, in this blog post I’ll share six elements that you should consider before you invest in a franchise. 

This is what we do. We educate franchise leaders so that they can manage the franchise they have chosen or built so they can be as successful as possible, focusing on the business management and leadership processes to increase their chances for success.

• There are over 3,000 brands in the United States for you to choose from, but there are only a few that are...

There are a lot of things you obtain when you invest in a franchise, but there's also a lot you don’t get. 

If you are considering investing in a franchise, this blog post will give you key tools to decide. If you are already a franchisee and you are struggling with your business, this information will help you understand why this is happening and what you can do to change this.

• Either way, after reading this you’ll better comprehend what you are getting from a franchise and, most important, what you do not get from a franchise. 

This will open your eyes so you can make smart decisions for the present and future of your business!

4 things you get when you invest in a franchise

When you buy a franchise, the franchisor, which is the owner of the franchise brand, gives you in return a proven brand. That means you get:

1. A defined product or service that customers are willing to exchange money for. You also get all of the guidance and training you need to ...

Many people wonder if franchising is a good investment. I’ve been in the franchise industry for more than 35 years, therefore, I believe that franchising is a great investment. 

• It’s just that franchising is not for everybody. 

In this blog post, we’ll review why franchising is a great investment and how you can make sure you are making the most return out of that franchise investment.

The two parts of businesses

Here at The American Franchise Academy, we conceive businesses in two parts:

1. The brand is the first part, which includes the product, the service, or what you sell in return for the customer’s money.
   It has to be a good enough brand so that people are willing to exchange their hard-earned money in exchange for your product or service.
   It also implies the service processes, the image, and the marketing that is produced by that brand. 
2. The management systems are the second part of the business. This includes how you get profit...

Many people think that if you get a franchise, you can become rich. But investing in a franchise has nothing to do with the profit you can produce over what an independent business can produce. 

• Yes, there are certain advantages. But in general terms, the franchise is still a business. 

That means that how much profit franchises make doesn’t depend on the model itself, but on your understanding of the business financials and the application of certain business principles. 

Do you follow us on YouTube? There are over 150 videos with knowledge, tools, and resources that can help you be successful in your franchise! Subscribe now to get access!

The good news is that you can increase your chances of getting a profit by following these rules.

Know what’s the break-even point of your business

The break-even point is the number of sales or revenue that you must have to cover the business cost and have no loss, but also no profit. 

Franchises have...

Acquiring a franchise requires a significant investment. And usually, the higher the investment, the higher the Return on Investment (ROI). 

• But are franchisees investing the right amount and in the correct places, to ensure their long-term success?

That is what we’ll dig into in this blog post. First, we’ll go over what is a normal franchise investment and then, how we at The American Franchise Academy think this process should be, to have a great impact on your business.  

What a traditional franchise investment looks like

After you have selected what you believe is the best franchise, you’ll have two types of expenses: one-time investments (or the startup cost of the franchise) and ongoing ones (which you'll constantly have).

One-Time Costs

• Franchise fee

This is the initial payment for the right to open the unit. Multi-unit franchisees will have to pay it every time they open a new unit. It could be anywhere between $20,000 to $50,000...

Turnover is the biggest hidden expense in your business today, especially if you are in the retail and service industries. Why are you not aware of how much it is costing you? Because it is merged into all of the line items and expenses in your profit and loss statements.

• Even though you don't have visibility for it, it is affecting every part of your operations. That’s why turnover has the biggest potential for financial and cultural damage.

With this blog post, I will help you calculate the costs of turnover, walking you through each of the line items that are part of this expense. 

Before we start, find a piece of paper and a pencil, or open an Excel sheet, so you can follow the math and understand and be clear on what is the cost of turnover for your organization. 

Please note: this calculator is just an approximation of how much it costs to lose one employee in a hypothetical business. You can use this information as a model to calculate your turnover expense...

 Being mindful of your expenses is a critical responsibility for a multi-unit franchisee. However, that alone cannot drive your long-term success. If you focus only on cost control, you won’t be able to move forward with strategic thinking and growth for your business.

• Every franchise brand has a proven financial model, we call it unit economics. 

There are five things about your business and the franchise brand that you need to be aware of to truly maximize your profits, make the most of your investment, and be successful as a top-performing franchisee. 

1. Understand the Unit Economics of the brand

This is the first step for you to be a successful franchisee. Financially speaking, you need to know the limitations of the brand you invested in. That means, knowing how to maximize the average indicators based on the experience that the franchise has had in its existing years.

Some of those indicators are:

• The average revenue of the franchise.
• The...