Franchise Focus

PJ's Coffee multi-unit franchisee does these 4 things before adding locations

Barry Prendergast, who owns six PJ's Coffee units, describes how decides when the time is right to expand with additional franchise locations.

Barry Prendergast, PJ's Coffee multi-unit franchisee, Provided

September 10, 2021

Multi-unit franchise ownership isn't something you pursue on a whim. Neither is it a great white whale that you go desperately seeking. It's a business development strategy rooted in identifying opportunities to grow, effectively analyzing them, and being nimble enough to strike if and/or when the right ones come along.

When I opened my first PJ's Coffee franchise in 2013, I had previously owned a business and saw firsthand what can come from looking to expand without setting up the proper infrastructure and achieving financial benchmarks first. Many franchisees fall into the trap of reaching for opportunities that aren't right for them given their specific circumstances, whether it be timing, market conditions, lack of commitment or alignment with the brand.

Becoming a multi-unit franchisee is a deeply personal decision that affects your lifestyle as much as your livelihood. Here's how I've dealt with the underlying question of determining when the time is right to expand with additional franchise locations.

1. Be certain of your grasp on the business model

Most of the opportunities for me to expand with additional stores came about as a result of word of mouth — other franchisees looking to sell or underperforming stores that the corporate team wanted my help with turning around. I had learned enough about and enjoyed the business model to the point where I felt comfortable taking on the challenge of a new location.

You also need to consider the type of expansion. When you're taking over another location, there's already some structure in place, so the process is less complicated than building one from the ground up. A new buildout requires a different timeline and considerably more thought put into the development strategy because of the increased scope of investment and time.

However, in either case, expansion demands you have sufficiently grasped the rhythm of your first business for a certain amount of time, so you can account for seasonality – if any – with the products or services you provide, as well as fluctuations in staffing and guest traffic. In short, you need to ensure you're maintaining high levels of customer service. When you open a new store, the first couple of impressions you make on your guests are important for establishing expectations and building strong relationships that result in repeat business, loyalty and advocacy.

2. Develop a team you can trust

Your people are going to be the ones that make you successful. When expanding from a single location to multiple businesses, you'll inevitably reach a point where you need a management team to maintain the operational standards you've established. You can't duplicate yourself, but you can build a team that follows a precedent.

Most people look for managers who are good at three things:

• Customer service
• Managing employees
• Administrative work

In my experience, you'll lose your mind looking for someone who already has each of these skills checked off. Instead, seek out individuals who have mastered two of them and help them to develop the third attribute.

I would caution prospective multi-unit franchise owners who may be prone to micro-managing away from trying to expand — if they can't learn to relinquish some control. As you grow, you will face the fact that you won't have as tight-knit relationships with each of your employees as you did when you own one or two locations — reinforcing the need for a team you can trust. As those direct relationships loosen to a degree, you have to coach your managers to develop those bonds; they need to become an extension of you.

At the same time, you have to reconcile the fact that your managers may not do things exactly the same way you do, but they can be just as effective. You also should be prepared for when they slip up. I let my managers know they can't be afraid to make mistakes. I always tell people, "If you don't make mistakes, it means you're not trying hard enough." Your team will never improve if they don't encounter some hurdles because they'll never learn to overcome them.

Your job as the business owner is to mentor them through these situations and work to bring out the best in what they can do.

3. Work with a supportive franchisor that has your confidence

Your relationship with your franchisor will have a direct impact on your ability to expand with multiple units. You have to find a franchisor that's not just in it for the franchise fee and collecting monthly royalties. Identify one that's looking to build a relationship with you and support you- someone who's in it for the long haul. In other words, you won't be satisfied working with a franchisor that just wants a honeymoon; they need to be committed to that 10-plus-year marriage.

I've been fortunate with PJ's Coffee because they've always been committed to seeing me succeed and grow. The corporate team has worked with me on a development timeline and strategy when it came to opening more stores. They also have provided overwhelming marketing support to help me gain traction in new markets.

Most importantly, they value transparency and encourage an open dialog with franchisees. I don't sugarcoat things, so everyone involved has a clear understanding of the situation. Finally, I'm dedicated to making my stores as strong as possible, which PJ's appreciates in return.

4. When the right opportunities come along...

Be certain you're in the position to grow, which begins with strong fundamentals: people and processes. Once you've got those two functions firing on all cylinders with your first business, you'll be in a great position to be selective about opportunities to expand as a multi-unit franchisee.

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