Multi-unit franchising is a growing trend across South Africa, and contrary to widely held perception, the growth opportunity isn’t limited to the restaurant sector. As we begin the new year 2026, existing franchisees in various sectors – from grocery and liquor stores to retail and education – are increasingly considering the potential to expand their franchise operations. However, success with a single franchise store doesn’t automatically equate to success with more than one – the move into multi-unit franchising requires very careful consideration and planning.
According to Henk Botha , Franchise Specialist at FNB South Africa. The shift toward multi-unit ownership reflects a broader trend in franchising in which established brands are increasingly prioritising internal growth – often preferring to give additional outlets to proven operators rather than recruiting new franchisees. “This creates real opportunities for existing franchisees,” he explains, “but expansion decisions need the same careful thought as one would give to entering franchising for the first time.”
Botha says that one of the biggest questions for any franchisee thinking about growth is whether to open more stores within their existing brand or move into different brands. While both approaches can work, moving across brands is significantly more difficult and often restricted by existing franchise agreements.
“Franchisors want owner-operators who are fully committed to their brand,” he explains. “So, most franchise agreements have limitations around outside business interests because they don’t want you dividing your attention. As a franchisee, you need to get consent to branch out – and you’ll only get it if the new business doesn’t compete with theirs – for your time or their share of market.”
Botha says the key to franchise portfolio expansion is choosing businesses that complement rather than compete. Consider a Grocery retailer who adds one or more liquor outlets. It works because the businesses complement each other. Similarly, a retailer who adds a tool hire business alongside their Hardware store creates natural synergies.
Even when staying within a single brand, franchisees face other potential pitfalls. One of the most common mistakes in multi-unit expansion is opening stores too close together. While franchisors may encourage multi-store ownership, this strategy can backfire for individual franchisees. Opening multiple outlets near each other might increase your presence, but if you’re selling to the same customers, you’re not growing your market – you’re splitting it. “This becomes particularly problematic from a funding perspective,” Botha points out, “because you’re taking on more debt and operational costs while potentially generating limited revenue growth.”
The problem can intensify when franchisees use money from successful stores to fund new locations as supporting a struggling store can quickly eat into the profits of your best-performing operation. This risk is especially high when franchisors offer existing operators the first chance to buy underperforming stores, often at reduced prices. While experienced franchisees may spot fixable problems, like too many staff, poor inventory management or weak margins, fixing these may be more difficult than anticipated.
He also highlights how important it is to think about the cash flow impact. “A cheaper purchase price doesn’t make up for the drain that an unprofitable operation could have on your healthy stores. Sometimes the smartest decision is walking away from what looks like a good opportunity on paper.”
Beyond these financial considerations, Botha emphasises that multi-unit ownership requires a fundamental shift from operator to business owner. Most franchisees can effectively manage up to six or seven outlets, particularly in quick-service businesses, before needing formal management structures. Beyond this point, you’re no longer running franchise outlets – you’re running a franchise business, which needs dedicated admin support and operational management.
“The opportunities in 2026 are there for franchisees who approach expansion with discipline and careful planning,” Botha says. “Sustainable growth requires that your business is genuinely ready to support it. This goes beyond financial capacity and demands operational readiness, strategic fit, and honest self-assessment. Remember that, sometimes, a good single business can become a struggling multi-unit business if expansion isn’t approached correctly.”
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