What is a Single-Unit Franchise?
A single-unit franchise is one of the most common and the oldest form of franchises. In this form of the franchise business, the franchisor allows the franchisee to operate in a single location. The franchisee has the right to use the operating system, trade name, and trademarks.
In this type of franchising, the franchisee and the franchisor share a direct relationship. A single-unit franchise is also referred to as mom and pop stores because it is one of the best options for those looking for low cost franchises.
What is a Multi-Unit Franchise?
A multi-unit franchise, on the other hand, is one that the franchisee owns and have the right to operate more than a single unit in the same region. Most of the new franchises UK today are a multi-unit franchise and they are gaining popularity among interested franchisees.
Over the years, multi-unit franchises have transformed into large corporations and developed their own franchise brands in their portfolio. These franchises are able to operate robustly under a single franchisor. It’s possible to opt for small van based franchises under the multi-unit franchise umbrella.
Difference Between a Single-Unit and Multi-Unit Franchise
Cost per Unit
When a per-unit cost of both single-unit and multiple-unit is compared then the latter comes off as a better choice for investment. A single-unit franchise is expensive and has a slow growth compared to a multi-unit franchise.
Training and Support to Each Franchisee
In a single-unit franchise, the franchisor has to provide training and support of each franchisee individually, which can become hectic and stressful. On the other hand, a multi-unit franchise allows the franchisor to deal with a single franchisee that’s spread across multiple locations. Many part time franchises are a part of a multi-unit franchise system.
Fewer Pitfalls for Single-Unit Franchisees
A single-unit franchise is easier to operate and requires little investment to operate as compared to a multi-unit franchise. You get direct support from the franchisor in terms of training your employees or staff if you plan to hire some. Most coffee franchises and small grocery stores are a part of a single-unit franchise.
A single-unit franchise is an affordable option as compared with a multi-unit franchise. But the per unit cost of multi-units is much lower than a single-unit. However, if you plan to own a small franchise to see how it goes then choose a single-unit franchise because it’s easier to operate. If you want to be a part of a larger group, you will need more capital to become a part of a multi-unit franchise business.
Multi-Units are Better Structured
Multi-units are sophisticated and have a better operational structure when compared with single-units. An experienced legal counselor generally represents multi-units in their entire contract, due diligence, and sales agreements. They have a better understanding of their rights and duties as a franchisor.
We hope that this post was useful in determining the difference between single-unit and multi-unit franchises. When you plan to invest, make sure you have considered all the pros and cons of each franchise type to secure your investment.
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