Greg Nathan's Tip #23: Cloning Franchises: Insights from the northern leopard frog
This week Greg offers tips on how to effectively manage a multi-unit franchise company.
Cloning Franchises: Insights from the northern leopard frog
If you are a franchisor I bet you've wished once or twice that you could clone your best franchisees. Actually, you can. It's called multi-unit franchising.
Like cloning, which started in 1952 when two American scientists cloned some northern leopard frogs, multi-unit franchising has been around for some time. And like cloning, the processes for selecting and supporting multi-unit operators have also been gradually improving through trial and error.
Tips for supporting multi-unit operators
For instance, in a research study involving 870 multi-unit franchise companies, we found they were significantly less satisfied than their single unit counterparts with the support being provided by their franchisors.
So here's a tip: Try to partner your better caliber field support managers with your multi-unit operators (MUOs). If this is not possible, ensure your MUOs have the opportunity to spend regular time with your senior financial executives.
In another study we just completed for a large franchisor with a significant number of MUOs, we found the most successful MUOs scored higher on measures of leadership, communication skills and business acumen. Before allowing franchisees to take on more units you should be measuring these and other important attributes.
Probably the most significant insight I have heard from franchisees and franchisors who have experimented with multi-unit operations is this: “When you get three or more units, everything changes.” In other words, a successful single unit franchisee can take on another unit and work a bit harder, or put their partner into the second unit, and keep managing things pretty much the same way. And they will probably make a bit more money. But this “work harder” strategy is a recipe for disaster if they grow beyond this.
So, let's not be like Dolly, the cloned sheep who died prematurely. If we are going to use multi-unit franchising to clone our best franchisees, let's make sure they have the best chance of a long and prosperous life
by equipping them with the right knowledge and support.
Until next time,
Greg Nathan
Founder
Franchise Relationships Institute
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