It's been said that the more things change, the more they stay the same. You'll notice that most of the same brands have returned to this year's Multi-Unit 50 lists. What has changed, however, is their rankings, as well as their percentages of multi-unit owners.
The differences from last year's MU50 rankings may reflect the challenges in the economy and the lending environment franchisees have been facing for the past few years. Certainly many units, regardless of ownership, have struggled; closures and resales have been on the rise. Despite scarce credit, multi-unit franchisees have been more likely than start-ups to receive financing to open new units. That's why franchisors have been targeting multi-unit franchisees for new unit sales by offering attractive incentives. Franchise systems with a high percentage of multi-unit franchisees have been more stable and have weathered the storm better than others.
This trend is likely to continue. As we gradually come out of this economic hole, business will pick up, but with many of the weakest units culled from the system. Multi-unit franchisees with the best-performing units will be in a position to continue to grow most rapidly in the months and years ahead. And lenders (not a group known for their rapid readjustments) will remain conservative, preferring to make loans to multi-unit franchisees who can show years of success, as opposed to start-ups with no track record.
Paul Wilbur is chief operating officer at FRANdata, which supplied the data for this year's MU50 rankings.
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