A single-unit or direct-unit franchise is where a franchisee invests in the right to operate one location or branded business. This is the oldest and simplest form of the franchise relationship.
While single-unit franchising is still very common and can be a wonderful way to invest in business ownership, it does have some weaknesses for franchisors:
- • As each location requires a new franchise, franchise system growth may be slower than multi-unit franchising, and the cost of providing services to the franchise system may be more costly because each unit has to be supported individually.
- • There are more franchises to work with, and those franchisees may have less capital and be more wary of taking business risks than larger multi-unit franchisees.