Multi-unit ownership used to be a rarity in franchising, but the tide has turned away from the owner-operator model. Now, more than three in four restaurant franchises are run by multi-unit franchise owners.
That’s because multi-unit ownership brings with it a slew of advantages over single-concept operations – from heightened brand awareness and revenue potential to reduced operating costs and shared resources.
Multi-unit ownership has its inherent upsides, but not every franchisor has the systems in place to adequately support multi-unit agreements or expansion. This is just another area where Angry Crab Shack excels.
Not only do we have development agreements available for single and multi-unit owners, we have perfected our concept and systems to foster franchisees’ strong, sustainable growth.
Whether that means starting out as a single-unit owner, investing in multiple units right away or eventually expanding to additional units, we work with our franchise owners to achieve their individual goals for business growth.
Here are some ways we accomplish that:
1. For the Penny Pincher: Low Startup Costs and Strong ROI
For most franchise owners looking to expand with multiple units, lack of capital represents their most significant barrier to entry.
Even if they have strong profitability at their current restaurant, that doesn’t necessarily mean they’re in prime position to put up the money needed to get a new location up and running. That’s where Angry Crab Shack is different.
“Angry Crab Shack is by far one of the most cost-conscious restaurant franchises out there, and initial startup costs pale in comparison to those required by many other restaurant franchisors,” said Andrew Diamond, Angry Crab Shack president. “In particular, our second-generation real estate strategy brings franchise owners significant savings for a much more reasonable initial investment.”
Because the Angry Crab Shack corporate team seeks out real estate from former restaurants, franchise owners save boatloads of money getting their restaurant up and running.
These sites already have a robust kitchen space in place, with refrigerators, freezers and other expensive restaurant equipment already built in.
Not only does this save franchise owners thousands of dollars in their initial investment, it also expedites the build-out process and helps them open their doors and begin turning a profit much sooner.
2. Training and Technology to Run a Tight Ship
“We also created robust training programs to prepare franchise owners for multi-unit ownership,” Andy said. “This training offers comprehensive business and operational management best practices, including outlining everything from hiring and training your restaurant staff to efficiently running payroll, inventory and every other business management process to keeping things running smoothly and providing superior guest service.”
Our operations manual, in conjunction with the robust training program, outlines all the tools for success used by our corporate team and current multi-unit owners.
“Multi-unit ownership is very different operationally than a single-unit owner, so we’re sure to tailor our programs based around the ownership model our franchise owner pursues,” Andy said.
Different proprietary technology systems also make managing multiple locations much more efficient for franchise owners since it takes much of the guesswork out of traditionally labor and time-intensive business management processes.
“Our proprietary inventory management system under development is particularly useful for multi-unit owners, and it really helps them along the path to growth, as they expand from one to two, three or more restaurant locations,” Andy said. “We’re currently rolling it out across locations, and it already has helped provide a lot more visibility into each location’s existing inventory, future inventory needs and optimal ordering times.”
The inventory system completely streamlines the entire inventory tracking, ordering and purchasing processes, which is crucial to boost a restaurant’s bottom line.
“Our POS [point-of-sale] system also provides valuable insights and metrics for our franchise owners, and it ties into our inventory management system,” Andy said. “This helps franchise owners order more of the most popular, high-ticket items, which also, in turn, optimizes their bottom line.”
3. Making Waves: The Ripple Effect of Multiple Units
“Many people only consider the financial resources when they’re hoping to expand and become a multi-unit owner, but your human capital is just as important,” Andy said. “Before you grow, you need to make sure you have all the training and systems in place to make sure that growth is efficient and sustainable, while staying profitable with multiple units.”
With all the right management and operational systems in place, along with highly-trained and skilled staff and managers, multi-unit franchise owners are in prime position to efficiently – and profitably – reap the benefits of expansion.
“It’s so important to stick to the systems and keep your staff accountable, because as you grow and take on a higher-level oversight role, it becomes much more difficult to run a strong business if you’re not leveraging those efficiency-maximizing best practices,” Andy said. “However, if you already have a solid infrastructure in place, expanding with multiple units can be one of the best decisions you make as a business owner.”
Multi-unit ownership not only lets restaurant owners enjoy a greater work-life balance with less day-to-day involvement in operations, it also comes with many business management and profit-boosting advantages.
For one, there’s much stronger revenue potential in owning more than one restaurant. Running multiple restaurants brings in more revenue than owning a single unit, and a greater store footprint with streamlined operations also helps reduce costs.
Shared resources, particularly when it comes to your inventory, optimizes operations and serves as a strong competitive differentiator. You also may have the opportunity to share managers across your locations should one of your managers go on vacation. And, when you open second and third locations, you have the benefit of training your staff in your existing, open location.
Multi-unit expansion also bolsters your brand awareness, particularly if you expand into nearby markets. This has a compound effect on each of your restaurants, drawing in new crowds and guests from other areas.
“The benefits of multi-unit ownership in the restaurant space are inherent and far-reaching, so we make sure we provide franchise owners with all the systems, tools, technology and best practices to expand, or start out with Angry Crab Shack as a multi-unit owner,” Andy said. “Single-unit franchise owners within our system quickly see success when running their location, so it’s not like we have to ’sell‘ anyone on multi-unit expansion. For us, it’s all about helping them grow profitably and sustainably, whenever they decide to make that move.”