Opportunities abound, but be careful
My first entry into the franchise business was in 1986 when I acquired 24 Dairy Queen restaurants in Texas. In less than a year, I was up to 55 stores and had become one of the largest franchisees in the entire Dairy Queen system. I had more credit than sense.
Over the years, I built a company with over 80 multiple-branded restaurants, including hamburgers, ice cream, chicken, pizza, and full-service restaurants. Many lessons were learned through the good and bad times over the last 20 years, and don't I wish I knew then what I know now? I would have grown a lot smarter had I spent quality time with experienced multiunit operators and franchise industry leaders in those early years.
As a multiunit operator your success depends upon many factors, most of which you control, but sometimes you can be in the wrong place at the wrong time. I recall attempting to sell operating restaurants when the multiple on cash flow was less than two times and a few years later the multiples grew to over six times. The roller coaster of financing markets, market conditions, labor markets, and all the factors impacting small business operators require you to be prepared for growth. Having a relationship with your peers can be invaluable in making those critical decisions.
I wish I had fully understood "good unit economics" in 1986. Why did I think in the early years that cost control meant lower labor and giving less service than the customer deserved? Even well intended, why did I worry more about national system issues than taking care of my stores? Through lots of hard work and relationships with some great people I finally learned how to build a successful company that takes care of customers, provides opportunities for great employees, and makes some money too.
Learning from and getting to know other successful franchisees is a great way to "grow smart." The problems we face are common. Visiting with others who have greater experience can provide insight to improve your management skills and your growth success. Getting to know the up-and-coming franchisors looking for capable new franchisees will help you decide if you are ready to take the plunge into multi-concept waters.
You have the opportunity to figure out now, and not later, what to do as you grow your franchise opportunities by participating in the 2008 Multi-Unit Franchising Conference in Scottsdale, April 23 - 25 at the wonderful Hyatt Regency at Gainey Ranch. I hope you will join me in Arizona to network and learn at a conference designed specifically for multiunit franchisees.
See you there!
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