District Manager: How Many Units Should They Oversee?
Multi-Unit Franchisees can truly have time and financial freedom. But the more stores they operate, the less attention they can give to each one.
- That’s why having a District Manager is critical to ensuring all units function optimally.
But, how many stores should these leaders oversee? Here are five considerations you must analyze to make sure the District Manager performs at their best.
1. Distance
If the units are far apart, your District Manager will spend a significant amount of time traveling between stores. And if the distance is considerable, there may be an increase in expenses such as gasoline, hotel (if they have to spend the night), food, and other supplies required for the unit visits.
This means that even within your organization, the number of units a District Manager should oversee might differ depending on how close or far the units are.
2. Complexity
The complexity of your business model and the industry you operate in will also influence the number of units a District Manager oversees.
It’s not the same to supervise a franchise unit with 150 employees, which requires a lot of equipment and maintenance, and has customer challenges, as one with only 10 employees, fewer issues, and not that much equipment or operational complexity.
The time the District Manager spends on detecting opportunities, reviewing information, reporting, and analyzing the business to make an effective plan will vary depending on these factors.
Don't miss: The 7 Most Critical Responsibilities of a District Manager
If your business is highly complex, the District Manager must supervise fewer units, so they have enough time to execute and maintain the systems in each store. If the operation is simpler, they can handle a larger number, since fulfilling the tasks should be fairly easy.
3. Skills
When promoting your next District Manager, you should consider that being a unit leader is nothing like being a District Manager.
Your candidates' training, knowledge, and experience will make a huge difference in their performance. It is crucial that they know exactly what to do and how to be a good District Manager, and that they have a set of skills, learnings, systems, and processes to execute the job properly.
If your new leaders haven't had that training and development, give them fewer units until they figure out what tools, processes, and routines they need to be successful. Contrariwise, if the person has prior experience and already knows what to do, assign more stores.
Forget Super GMs! Your Multi-Unit Franchise Needs a District Manager.
4. Cash-flow
The District Manager’s salary requires additional benefits, a bonus program, and operational expenses (vehicle, gasoline, repair, maintenance, travel). And all of that money will come from the cash flow of your business.
That’s why you have to be conscious of the cash flow from each of your units, and calculate how many units will cover the investment of a Multi-Unit Leader.
For example, if you require a cash flow of at least five units so you can invest in a District Manager, this will be the minimum number of units needed before you hire a new district manager.
Review these tips to help you hire the best District Manager
5. Business and Personal Goals
How many units do you want to have? When do you want to have them? If you want to add, for example, six units within 12 months, clearly, you're going to need a leader to oversee those units.
But if you only want to have four more units in the next two years, you could fulfill the District manager role a Multi-Unit Franchisee.
A smart thing to do is grow within the District Manager's area, to ensure your growth delivers the best return on investment and that your district manager oversees the units correctly.
You should also consider your personal goals. One of our clients was directly managing one unit and overseeing two more, and she was quite overwhelmed when she joined COMMAND, our Flagship Program for Franchisees.
As we worked with her, she concluded that she would rather have well-deserved time freedom than money in the bank. Of course, she wanted profitability, but having that desired freedom was more precious to her, and she was willing to give up the cash flow to pay for a District Manager.
If, on the contrary, you want to accumulate as much profitability as you can, you may end up playing the District Manager role yourself until you reach that financial goal.
Don’t miss these 10 tips to prepare your organization for growth
As you can see, resolving how many units a District Manager should oversee depends on many aspects. This is one of the things that we help our franchise clients determine through COMMAND, our Multi-Unit Ownership Certification Program. In this 12-month training, we franchisees go from one unit job to a multi-unit enterprise.
For those of you who already have a District Manager or are in the process of hiring or promoting someone into that position, consider providing the training and development they need to be successful and deliver the financial and business results you want.
For that, we have created LEAD, our Multi-unit Leadership Training. Go to DistrictManagerTraining.com and join us in our upcoming information sessions to know more details and the outcome you can expect.
I hope that you got value out of these five considerations. If you want to acquire more tools to help you become a successful franchisee and business owner, follow us on our social media (Facebook, Instagram, LinkedIn) and subscribe to our YouTube Channel, where we share tips and knowledge to inspire you and help you grow.
And don’t forget to listen to our podcast Franchise Success Formulas on Spotify and Google Podcast.
Reflections:
- How many units do you want to grow into?
- Do you have the necessary cash flow to cover the investment of a district manager?
- Are you considering growing within the district managers’ area to ease the supervision of the units?
- Are your district managers skillful and do they have the processes they need to be successful?
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