How to Effectively Manage Multiunit Retail Enterprises

Do the best that you can until you know better, then when you know better, do better.

Maya Angelou

Managing a vast network of retail stores is no easy feat, even for large enterprises. While each unit is an additional revenue stream, every new unit adds a degree of complexity to your business operations.

Your customers must have a consistent experience across your entire network of stores. Inventory must be managed, and every unit must comply with SOPs and applicable regulations.

This raises the question: How can you effectively navigate the complexities of multiunit retail management? We have some answers for you!

What is a Multiunit Retail Enterprise?

A multiunit enterprise is a business that operates more than one 'retail' unit. Think supermarkets, clothing brands, restaurants, wellness chains.

However, a multiunit retail enterprise can be set up and managed via different business models. The two most common in America are:

• Company-Owned Units: A single-parent company owns and operates every retail unit. Think Apple.
• Franchising: Franchising is where a business owner (a franchisor) partners with independent business owners (franchisees) who operate under their brand, and follow their standard operating procedures and marketing strategies. Subway, 7-Eleven, Tim Hortons, and Ace Hardware are some well-known examples that follow this business model.

While each has its pros and cons, they share some similar challenges when it comes to effectively managing them.

Top Challenges in Managing Multiunit Retail Enterprises

Running a multiunit retail enterprise comes with a full spectrum of challenges; some significantly impacting your business operations, while others could cause simple inconveniences to employees and customers.

1. Enterprise-Wide Store Compliance

Enterprise-wide store compliance can be further broken down into three major categories:

• Compliance with Operational Standards: Adhering to operational standards is the foundation for a successful multiunit retail enterprise. Monitoring retail units across multiple locations and state lines is a time- and resource-intensive exercise. Variations in operation procedures can have a significant impact on your brand's reputation.
• Legal Compliance: Every retail store is governed by local and federal laws that vary depending on its location. These include, but are not limited to, building codes, labor laws, and environmental regulations. Failing to comply with the above regulations can lead to hefty fines, open your business to legal trouble, and, in extreme cases, even closures.
• Health and Safety Compliance: Healthy and Safety compliance directly impacts the well-being of employees and customers. Lapses can leave stores and the larger enterprise open to expensive litigation and serious reputational loss.

2. Visibility into Assets and Inventory

Keeping track of assets and inventory is a tedious part of the day-to-day operations of a multiunit retail enterprise. Under or overstocking inventory and under-utilizing assets drive up operational costs and impact revenue.

Inadequate management of your inventory can lead to:

• Stockouts: This can disrupt your sales and impact customer satisfaction and retention.
• Overstocking: This can put a strain on your cash flow.

The above two challenges must be addressed as priorities, as they will have the most significant impact on multiunit operations.

3.  Communication and Flexibility

Effective communication between headquarters, regional divisions, and individual stores or franchisees is essential.

While consistent customer experiences is the defacto goal, there should be room for a degree of flexibility while taking into account any information/suggestions being relayed up the management chain.

For example, a uniform pricing policy may not work if you have one store located in an upscale neighborhood of a Tier 1 city and another in a smaller location. Similarly, ensuring a seamless flow of information from top management down to individual retail units is equally vital.

4.  Consistent Customer Experience

When you run a multiunit retail enterprise, your customers come to expect the same experience as they did in your flagship store across all locations. Ensuring all locations adhere to a standardized routine when it comes to day-to-day operations is also difficult to implement and monitor. This is where SOPs, checklists, and audits play a big role.

Addressing Multiunit Retail Challenges

There are several approaches you can take to improve the overall management of your multiunit retail enterprise, such as hiring better talent, improving staff onboarding procedures and providing regular training.

That said, in today's fiercely competitive landscape, you need to be as efficient as possible. The best way to achieve this is by leveraging a robust suite of multiunit retail software.

1. Asset and Inventory Management Software

These are a class of specialized software that offers a centralized platform to track and manage all your physical assets and inventory across multiple retail stores.

These type of software can help you:

• Monitor your stock levels across your entire enterprise, identify trends, and forecast demand to avoid stockouts or overstocking.
• Keep tabs on your physical assets.
• Automate reminders to inspect and maintain those assets, as well as streamline the approval process to do so.

2.  Lease Management Software

Lease management software is specifically designed to help manage your leased spaces such as stores or warehouses. Lease management software will help you to track your real estate portfolio, with features such as:

• Automated workflows to verify lease contracts, gain necessary approvals, and make payments.
• Lease accounting features that automate journal entries, compute taxes as per local tax laws, and create payment invoices that are compliant with accounting standards such as IFRS 16 and ASC 842.
• Scheduled reminders for lease, CAM, and utility payments and lease contract renewals.

3.  Store Opening and Closing Checklists

Standardized procedures are important for consistent and efficient store operations across a vast retail network. That is where store opening/closing checklist software comes into play.

These programs allow you to:

• Create and customize digital checklists specific to your brand.
• Schedule automatic push notifications for staff devices at designated times.
• Actively monitor task completion status across all locations.
• Generate reports to track completion trends, identify areas for improvement, and ensure consistent execution across all locations.

4. Franchise Management Software

Franchise management software offer features to manage your franchise chain directly from HQ:

• Franchisee verification and management to reduce dependency on third-party agencies.
• Contract management and franchise-side compliance tracking.
• Mobile-compatible onboarding features.
• Automation for finance management (automated payment alerts, AP/AR calculations, reporting)

Summing Up

Operating a multiunit retail enterprise effectively and efficiently is a complex affair. That said, the right retail software, along with well-defined SOPs, can streamline your retail operations significantly.

Hubler offers a comprehensive suite of software for multiunit retail enterprises to enhance efficiency and simplify operations. Get in touch to learn how we can help!