Restaurant franchisees call it an “entrepreneurial portfolio,” and the last half of 2006 seemed dedicated to the practice of building a restaurant mosaic that would shield a savvy business operator from almost any kind of culinary downturn.

If the sandwich genre had a soft summer, then the franchisee could rely on her salad concept made up for any diminished sales. As cooler temperatures fired the public’s taste for burgers, it became less critical to that franchisee that his ice cream store across the street had tapering traffic.

The entrepreneurial portfolio encompasses a range of quick-serve and fast-casual dining concepts for a single franchisee or franchisee group. The broader the portfolio, the wider the possibility the business owner has for growth and sales, as well as insulation from the public’s fickle tastes.

Franchisees specializing in owning multiple units from multiple concepts made 2006 one of the biggest years ever in terms of franchise growth, sales, and development, according to figures from groups that track franchising, including Franchise Update Media Group and FranData. More than 500 new franchise concepts were registered in 2006, with the bulk building their growth strategies around courting existing, experienced franchisees in other concepts. And, for the first time ever, a survey released in October of more than 200 quick-serve restaurant franchisors determined that the majority of newest franchisees were now multi-unit operators, meaning that they owned at least five units. Of those multi-unit franchisees, a growing majority are owners of more than one food concept.

“Ten years ago, most food franchisors would not have been amenable to a franchisee taking on another food concept,” says Therese Thilgen, president and chief content officer of Franchise Update. “The reality is now that they’re the business drivers, they are motivated by success and want to grow more. They have really taken franchising to a totally new level in terms of sales and sophistication.”

Thilgen, who has spent two decades studying franchising and its trends, says that a movement built steadily over those 20 years has turned into a boon for franchisees. She traces the rise of multi-unit franchising to a recession and downsizing of corporate America in the late 1980s. Many managers were kicked out of the corporate structure and used their golden parachutes to finance franchise purchases.

But those folks brought a different background to restaurant franchising than the previous mom–and–pop, single-unit owners that had dominated franchising for so long. They had management experience, marketing backgrounds, and the ambition to expand their franchise into a smaller, more personal corporate empire.

“They weren’t satisfied with one or two,” Thilgen recalls. They reached out to franchisors, and the practice of recruiting multi-unit franchisees grew as a way to streamline franchise sales and management.

“Clearly it is easier to deal with 100 franchisees who own a 1,000 units than it is to deal with a 1,000 franchisees,” says Thilgen. “The great majority of actively expanding brands are looking at multi-unit operators only.”

As those multi-unit franchisees grew in numbers, they began to max out their sales potential with one brand. The result—a precursor to 2006’s franchise explosion—was the need to add another food concept, the need to build that entrepreneurial portfolio. next