franchisemarket Empowering Your Franchise Journey
In the world of franchising, there’s a buzzword making waves: M.U.M.B.O.s, which stands for Multi-Unit, Multi-Brand Operator. These franchisees are the heavyweights of the industry, managing multiple units across various brands with skill, efficiency, and expertise. They’re experienced, well-funded, and require minimal support from franchisors, making them highly sought-after partners.
Who Are M.U.M.B.O.s?
Multi-Unit Multi-Brand Operators
Unlike traditional single-unit franchise owners, M.U.M.B.O.s operate on a much larger scale. Here’s what makes them stand out:
- Experience: They know the ins and outs of franchise operations and require little guidance.
- Financial Strength: With significant capital reserves, they are better equipped to take risks and grow quickly.
- Diversification: They often manage franchises across multiple industries, creating a balanced and diversified portfolio.
- Track Record: Their ability to deliver results consistently boosts the reputation of the brands they manage.
It’s no wonder franchisors love them. In many cases, M.U.M.B.O.s oversee larger networks than some franchisors themselves.
The Rise of M.U.M.B.O.s
Data shows their influence is growing rapidly. According to FRANdata, the number of multi-unit operators managing over 50 units has increased by 112.3% since 2019, and this trend is expected to continue. Tough economic conditions haven’t slowed them down either.
With franchisors eager to expand quickly, M.U.M.B.O.s often secure multi-unit deals, signing agreements for 10 or even 20 locations at once. This group is fueling much of the franchise industry’s growth, contributing to the 15,000 new franchise units projected to open in 2024.
Why Are M.U.M.B.O.s Thriving?
1. Financial Strength
- High interest rates and tight lending conditions make it challenging for small, first-time franchisees to secure funding.
- M.U.M.B.O.s, however, are viewed as safer investments by lenders because of their proven track record and financial stability.
- Franchisors often offer them incentives, like discounts on franchise fees or reduced royalties, to encourage rapid expansion.
2. Industry Expertise
- Many M.U.M.B.O.s start with a single brand and expand into others within the same or complementary industries.
- For example, a restaurant operator might start with one fast-food brand, then add others in similar niches, leveraging their operational expertise.
- Similarly, a home services franchisee might expand into related fields like plumbing, restoration, or home repair.
- Some even venture into entirely new industries, such as hotel operators investing in fitness franchises or salon owners branching into health and wellness.
3. Geographic Flexibility
- Single-unit franchisees tend to stick close to home, but M.U.M.B.O.s think bigger. They expand to wherever the market opportunities are strongest.
- When one territory is sold out, they look to new regions, growing their footprint across multiple cities, states, or even countries.
Why M.U.M.B.O.s Matter to Franchising
M.U.M.B.O.s aren’t just big players; they’re reshaping the franchise landscape. By turning single-unit operations into multi-location empires across various industries, they’re driving the industry’s growth and resilience.
According to Matt Haller, CEO of the International Franchise Association, franchised businesses continue to outperform the broader economy despite challenges like inflation and labor shortages. M.U.M.B.O.s are a significant part of that success, ensuring that franchising remains a powerful force in today’s economy.
The Future of M.U.M.B.O.s
As territories fill up and markets evolve, these operators will continue to expand their reach, moving into new locations, industries, and opportunities. Their ability to adapt and scale ensures they will remain key players in the franchising world for years to come.
For franchisors, M.U.M.B.O.s represent the ideal partners for rapid, sustainable growth. For the franchise industry, they are the driving force behind its continued success and innovation.
