Multi-unit franchises provide opportunity in time of uncertainty
Franchise Update Media Group (FUMG), a leading industry resource for franchise development, has reported that, for the first time, multi-unit franchises are the new industry majority, providing growth opportunities in these times of economic uncertainty.
“Multi-unit franchises are one of the most important drivers of economic growth in the country, and are now attracting interest from private equity firms that want to invest in them,” said Therese Thilgen, president of FUMG. “Multi-unit, multi-brand franchises have proven to be the most successful model in the industry, and we expect this trend to continue.”
According to the independent research firm FRANdata, 52% of all franchises are now multi-unit operations. The largest 50 multi-unit franchisees increased the number of units they operated by 10% between 2005 and 2007. Fast food continues to be the most popular industry, claiming 35% of all multi-unit franchises, with the restaurant, beauty and baked categories each capturing 28% of all multi-unit operations.
“What multi-unit, multi-brand operators are telling us is that this economy is presenting opportunities for continued expansion,” Thilgen said. “We conducted a survey just before our annual Multi-Unit Franchising Conference which was held in April, and 68% of all franchisees said they are now seeking additional brands, and as they are expanding, private equity firms are showing great interest in being part of that trend. Now that banks have reined in their small business lending and tightened credit, franchisees are turning to other sources of funding. Multi-brand, multi-unit operators have a proven track record of success, and private equity firms are finding them to be a very attractive investment option.”
Founded in 1988, Franchise Update Media Group produces online franchise sites, magazines, research, books and conferences in franchising. Targeting franchise audiences online, in print and in person, FUMG delivers a combination of education and lead-generation sources that helps franchisors, multi-unit franchisees and suppliers achieve their growth objectives. (kbp)