Can Your Emerging Brand Support a Semi-Absentee Franchise Model?
Multi-unit expansion is the norm for growth in the franchise industry today. Franchisors are awarding bundles of units at one time more frequently than they used to. However, there are still many multi-unit owners who started with one location and invested in additional locations over time. Either way, franchisees who own more than a single unit are more prevalent today than they used to be.
The semi-absentee model of franchise concepts is contributing to multi-unit growth. As the name of the ownership model indicates, franchisees are present only part-time and typically work less than 40 hours a week at each unit. The franchise owners have hired managers to run the day-to-day operations, allowing them to either spend some time and resources at each location, pursue multiple business opportunities or even hold down “day jobs” outside of the franchise industry.
As an emerging franchisor, you need to consider whether your concept can sustain growth with owners who are not constantly present or if the owner-operator model is best suited for your brand’s expansion. With the owner-operator model, franchisees are usually at the location every day, overseeing operations and everything else to ensure the business runs effectively and efficiently.
Let’s take a look at what makes the semi-absentee franchise ownership model work.
Concepts that Work Well as Semi-Absentee Models
Most brick-and-mortar concepts work well as a semi-absentee ownership model. They include:
- Fitness/health and wellness
- Maid services
- Car wash
- Large restaurants
Franchises that utilize simple operations fit nicely into the semi-absentee model. Fitness concepts, for example, typically involve only exercise equipment and classes led by instructors or trainers. Traditional concepts that have existed for quite a while, such as those in the restaurant segments, for example, also work as semi-absentee because it’s not difficult to find a manager with food service experience.
The semi-absentee model usually requires the franchisee to invest more time up front to get the business up and running and become acquainted with the concept before hiring management. But, after managers are adequately trained in, franchisees can begin to step away and focus on other entrepreneurial pursuits.
As a franchisor for a semi-absentee franchise concept, you will want to avoid awarding agreements to business owners whose total investment does not afford the hiring of management level personnel and those who have a hands-on type of ownership mentality or who like providing direct oversight.
When Semi-Absentee Might not Work
While many franchise concepts are ideal for semi-absentee ownership, others are better suited as owner-operator models.
Concepts that are niche, require a high level of human interaction or are purely mobile are more easily operated with the franchisee fully involved in the business. It’s hard to find managers that can oversee franchises that are B2B concepts that require some technical expertise, provide home health care services or operate out of a van or truck. Many of these concepts require franchisees to become completely ingrained in the business in order for it to be profitable.
Emerging franchise brands may want to consider starting out as an owner-operator model to ensure growth, in the beginning, gets off to a strong start before awarding franchise agreements to entrepreneurs who want to be semi-absentee owners. Once all the kinks are worked out of the system and you can accurately assess growth potential, then you may want to contemplate utilizing a semi-absentee model.
But prior to making that decision, first ensure that all constituents understand how you define a semi-absentee model. No franchise can run itself without ownership oversight – neither can any small business, for that matter. Every business will require a minimum level of effort and management to be successful. In addition to understanding how the business runs and being able to step in when needed in an emergency, the franchisee must also provide management and leadership to the management team, play the major role in defining company culture, and understand where their money is at all times. Franchisors must define what this looks like in their franchise model before taking on semi-absentee owners and to be sure that they can communicate what their franchise will need and expect from an owner.
Semi-absentee franchise ownership comes with a higher degree of risk for the franchisor. Knowing how much risk and how you will manage it will be critical to understanding whether this franchise model will work in your business.
For help determining whether you can optimize growth for your emerging franchise with a semi-absentee ownership model, turn to Winmark Franchise Partners. With 30 years of franchising experience and more than 800 franchise owners representing almost 1,250 locations for five brands, Winmark Franchise Partners can you help grow your brand through sound strategy and expert franchising advice. Contact us here or at (844) 234-8520.