A Whale of a Deal: How to Engage and Land Multi-Unit Franchisees

As we know, multi-unit operators (MUOs) are the whales of the franchising industry, representing a significant share of total franchise units and possessing the expertise and capital necessary to drive expansion. For many franchise development executives, these franchisees offer immense opportunities if approached with the right strategy. Engaging these seasoned operators requires thorough preparation, personalized communication, and strategic use of data.

Multi-unit operators dominate several industries. They operate a significant majority of units in Quick-Service Restaurants (82.60%), Beauty-Related services (78.56%), and Sit-Down Restaurants (71.77%). Other industries with strong MUO presence include Baked Goods (60.04%), Automotive (57.88%), and Real Estate (55.30%). Additionally, more than half of the units in Frozen Desserts, Retail Food, and Business-Related services are run by MUOs. This highlights their critical role in industries that benefit from scalability and operational efficiency.

Here are some ideas to ensure productive discussions and lasting partnerships with MUOs.

Know your audience

Before engaging with any multi-unit franchisee, it is critical to do your homework. Multi-unit operators know about franchising and expect prospective partners to understand their portfolios, growth strategies, and operational preferences.

When targeting MUOs, it’s essential to focus on industries where they already have a strong foothold. Highlighting synergies with their existing operations, showcasing scalability, and presenting strong performance metrics, like AUV and market growth potential, will resonate.

For industries with emerging MUO opportunities, emphasizing diversification and long-term profitability can make your franchise offering attractive. Personalization and data-driven insights are key to effectively capturing their attention and building lasting partnerships.

Personalize your approach

Your outreach to MUOs must go beyond mass marketing. These franchisees are already receiving pitches from countless brands. To stand out, you need to highlight:

•  Scalability of your franchise concept. Emphasize operational processes, technology integration, and supply chain support.
•  Alignment with their portfolio. Showcase how your brand fits into their existing business model. For example: If they operate mainly in QSRs, focus on operational synergies, such as streamlined food preparation or customer traffic patterns. For MUOs with diversified portfolios, highlight opportunities for cross-brand promotions or diversification benefits.
•  Performance metrics. Present compelling data, such as AUV, EBITDA, and year-over-year growth rates.

Data-driven engagement

MUOs rely heavily on data to make decisions. To build credibility, you need to leverage market insights that align with their strategies. This could include:

• Market saturation levels. Show how your brand can thrive in the territories they operate.
• Demographic data. Demonstrate the viability of your franchise based on local consumer profiles.
• Industry benchmarks. Compare your franchise to competitors in terms of scalability and profitability.

For instance, if targeting an MUO with a focus on Frozen Desserts, you can point to the fact that MUOs own 53.92% of units in that segment, making it a proven area for multi-unit ownership.

Key influencers

Finally, you need to connect with the decision-makers. In multi-unit franchise organizations, decision-making can be complex. Some decisions rest with the franchisee/owner while others may involve executives responsible for operations, finance, or development. You need to:

•  Identify the right decision-makers within the organization.
•  Access their contact information to ensure direct outreach.
•  Understand their roles and responsibilities, allowing you to customize your message for maximum effect.

Creating relationships with the right individuals is crucial to avoid delays and ensure that your opportunity is presented to those with the authority to act. Armed with this intelligence and tailored strategies, you can make a pitch that will resonate with these mighty whales, ensuring productive partnerships and long-term success.

As COO of FRANdata, Paul Wilbur is instrumental in building the research and consulting framework at FRANdata. He plays an integral role in the strategic development of FRANdata’s suite of franchise solutions. Nearly a 20-year veteran at the company, he is the franchise business model expert and plays a key role in fostering strategic advisory relationships with some of FRANdata’s biggest clients.