Modular Construction Improves Cash Flow for Franchisees
Franchise owners of convenience stores, fast food restaurants and coffee shops have all turned to modular construction because of one simple equation: faster occupancy = faster cash flow. Because of the accelerated construction timeline with modular construction, franchisees are discovering that occupancy can occur months earlier than with conventional construction.
Here are three big advantages to using modular construction:
1. Faster Installation
Modular buildings can be delivered and installed as soon as a site is prepared by a general contractor. In some cases, this allows a franchisee to open 60-90 days sooner than with traditional construction. In one case, a popular coffee shop was built, installed and opened two months more quickly using modular construction compared to traditional site built construction. With an average daily sales volume of around $2,000, this earlier occupancy translated into nearly $120,000 in additional revenue. With a net profit margin hovering around 10 percent, this decision put an additional $12,000 in the owner’s pocket.
2. Faster Store Replacement
In another example, a franchisee wanted to demolish an existing store and replace it with a new one. With speed to re-opening as a primary consideration to protect market share and minimize lost sales, modular construction was chosen for its expedited timeline. A 3,000 square foot chicken franchise was delivered and opened within a five-week window, including demolition of the old store.
As crews were taking down the old restaurant, work on prefab custom modules for the new building was underway at a nearby production facility. The new restaurant featured exterior brick, and all interior finishes are identical to those used in their conventionally built stores. All cabinets, counters and planters, plus solid oak window frames and trim, were installed at the plant.
3. Consistent Labor Pool
The average franchisee owns and operates multiple stores in multiple locations. Finding reputable contractors and navigating local construction issues within these various locations can often be challenging. Modular manufacturers typically can build and deliver competitively within 500 mile radius of their factory. By partnering with a modular contractor, a franchisee can be assured of consistent quality and a steady labor pool knowledgeable of all the various code requirements. This relationship can reduce time and resources spent on multiple GCs in multiple regions.
These projects are excellent examples of how a client can receive quality equal to or better than conventional construction, while benefiting from accelerated construction schedules, with no compromise in aesthetics.
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