Entrepreneurial franchise owners have one goal in mind: multi-unit franchising. Why? Because that’s how you get rich. We’ve listed the tremendous benefits of multi-unit franchising as compared to operating a single franchise below.

1. Economies of Scale – The biggest benefit of operating several stores is economies of scale. Companies gain cost advantages as they grow. For example, certain franchises require vans as a means of transporting materials from one location to another. With just one franchise, the van would be used simply for that single store. However, with multiple units, the van could be used across all stores so the cost is spread out. If the van serves more than one store, its value to these stores increases while the actual cost of the van remains the same. Another example of this is employees. As you increase the number of stores, both regular employees and managers can be used at any of your stores so that you can share this variable cost with all your stores.

2. Territory Protection – Aside from spreading costs around more evenly, another advantage of a multi-unit operation is a matter of territory. In some cases, the franchise will offer its potential franchisee the opportunity to buy the rights to an entire territory for a price. Owning a franchise territory can protect your interest from future franchisees of the same brand who might be looking to cannibalize your sales. Not all franchises offer this kind of arrangement, but it is something worth investigating. In addition to location security, initial franchise fees are generally discounted with the more franchises you agree to build.

3. Familiarity – As the old saying goes, practice makes perfect. Franchising is no exception to this. Franchisees benefit from familiarity. Each brand has their own specific process for setting up shop at new locations. After going through the process of opening one Subway, for example, you will be completely aware of the entire process necessary for opening store #2. This is also likely to reduce your initial investment as you will not make the construction related mistakes that you may have made during the first go-around.

4. Marketing – Another feature of multi-unit franchising relates to marketing campaigns. Advertising can be used regionally, which will significantly reduce costs. With each dollar spent on advertising, you will receive an extended reach that will benefit each of your stores at once (assuming an effective marketing campaign is being used).

An inexperienced franchisee should never jump head first into a 10 store franchise agreement because they perceive that they are getting a good deal. It is always prudent to start with one store and grow slowly and steadily. The franchise process, while not rocket science, can still be overwhelming at times, and biting off more than one can chew would not help matters in the least. Slow yet steady growth along with efficient cost management will produce strong, long term dividends.