If you, a franchisee, are buying into a franchise opportunity, you may consider purchasing multiple franchise units. Though, you must ensure that your excitement is not getting the best of you and that this is indeed your best financial decision. Continue reading to learn whether you should purchase multiple franchise units and how one of the experienced franchise acquisition attorneys at FortmanSpann, LLC can guide you toward the right decision.

What is a multi-unit franchise opportunity?

Simply put, a multi-unit franchise opportunity is when a franchisee obtains the right to develop more than one franchise unit within a proscribed territory. This is seen as a great opportunity for a franchisee to expand in their career without having to expand into different franchises or businesses. Just some of the benefits are as follows:

  • A franchisee will be able to build a larger management team that they can utilize in all of their locations.
  • A franchisee will be able to simplify their marketing and advertising fees for all of their locations.
  • A franchisee will be able to increase their sales and build their financial wealth.

What should I consider when purchasing multiple franchise units?

If you are a prospective franchisor that wishes to expand their business from the jump, then you may have to request a multi-unit franchise agreement. This agreement may consist of terms and conditions surrounding the area development of your businesses, the area representatives of your businesses, and the master franchise and sub-franchisee of your businesses.

While purchasing multiple franchise units comes with its benefits, it must be done under the right circumstances. That is, you must carefully evaluate your multi-unit franchise agreement to ensure that the advantages of a multi-unit franchise outweigh the disadvantages (i.e., costs, legal obligations, etc). And so, you must ask yourself the following questions:

  • When opting for a multi-unit franchise, does the franchisor offer you a discount for your initial franchise fees?
  • When opting for a multi-unit franchise, does the franchisor offer you a discount for your royalties?
  • When opting for a multi-unit franchise, does the franchisor offer you a protected territory?
  • When opting for a multi-unit franchise, what is the minimum amount of franchise units that you must buy into?
  • When opting for a multi-unit franchise, what is the development fee that you must pay to obtain this right?

It is also important to mention that, when opting for a multi-unit franchise, you may have to evaluate and negotiate additional terms in your financial disclosure document. And this should not be done without first receiving sound legal advice. Without further ado, retain the services of one of the skilled franchise attorneys immediately. We can assure you that we are passionate about your case, so contact us today.