May 18, 2012

WSJ on Franchising - The Big Get Bigger

>>>>> The Quandary of Large Multiples vs. the "Hands On" Operator


There's a slight difference between the ratio of McDonald's stores
per Operator in the USA as stated by McDonald's Corporation and
by Franchise Equity Group. While I don't keep an inventory of the
names on every franchise agreement I know enough to identify
trends.

I believe Oak Brook would count every person approved as an
Operator and divide that number into the total number of stores
in the country.

In other words, a twelve store operation with the original Operator 
and their two children (who are approved Operators) all functioning
as one entity would be counted as three operators by Oak Brook.
I'd count that as one operator. But there's no winning this numeric
argument because there are variations all over the board.

The fact is, the ratio of stores per Operator is higher and will keep
growing into the future.

I continue to hear the small Operators described as a "liability""
to the corporate side.

..

2 comments:

Anonymous said...

But wouldn't including each approved individual account for an increased amount of Operators making the average number of stores per Operator less?

Richard Adams said...

Yup, that's why my number of Operators per store and Oak Brook's is less. They count everybody.