Twelve years ago, Los Angeles executive Terence Kelly and his brother talked about going into franchising. But it wasn't until their stock portfolios took a beating last year that they decided to act on it.

Kelly said he saw an opportunity to make a lot of money. "And eventually, 10 or 15 years down the road, if we didn't want to do it anymore, we could sell."

A yearlong search for the perfect franchise led Kelly to Georgia. Last week he toured Great Wraps, a small Atlanta-based restaurant chain that's been popping up all over the United States. It's his first choice of the 13 he's researched.

Finding the right franchise is critical. That's because Kelly and his brother aren't planning to open just one store.

The duo wants to join the franchising big leagues by opening 10 stores --- maybe 15. They want a place to put their retirement money and a substitute for Kelly's salary as the vice president of a golf course company.

"We have a ton of cash lying around, and [buying franchises] makes much more sense than putting it into the stock market or flushing it down the toilet --- whichever way would go faster," Kelly said.

They want the rights to franchise to others in Los Angeles, because they think Great Wraps can sell on every corner.

And in a city with 4 million people, there are a lot of corners.

Mark Kaplan, chairman of Great Wraps, is seeing franchisees like Kelly more and more. He says mom-and-pop, single-store franchisers are being replaced by professional franchisers with business savvy, deep pockets and an interest in the big time.

Control of investments

Multiunit franchising has been on the rise for years, but the recent economic downturn has sent a flood of executives and other business people into franchising, said Don DeBolt, president of the International Franchise Association.

"More people are going into franchising, and the people who are doing it are doing it bigger," he said. "They've been hammered by the markets over the last 18 months. This way, they can have control over investment outcomes."

Therese Thilgen, president of Franchise Update Inc., said multiunit franchising really picked up about 10 years ago.

"What was happening before, is a franchisee would open a couple of stores," she said. "The intent wasn't ultimately to have 20 or 40; they grew one at a time. Now, the difference is intent. People go in knowing they are going to have 40 restaurants."

In March, Thilgen's company will sponsor a national conference for multistore franchising in Atlanta. The conference, she said, will address the needs of this new franchisee.

Thilgen's company uses Washington-based FRANdata to collect information about franchisees. FRANdata's Atlanta listings show 398 franchisees with multiple locations, and 468 franchisees with single locations. Its national database shows a little more than 10 percent of franchisees own multiple stores. Several of them own more than 100.

Some multiunit franchisees have gotten so big that they have swallowed up their parent companies, DeBolt said. The Blimpie sandwich chain and Coverall Cleaning Concepts are both owned by former franchisees.

In the food sector --- franchising's largest sector --- there are more franchisees with at least $10 million in revenue than there are franchisers with those numbers.

Many operators now open franchises with several different companies. A franchisee might own four Burger Kings, 10 Subways and a handful of express mail companies --- all in the same city. Investing in different franchises is similar to investing in a diverse portfolio --- minimized risk and increased revenue.

Better communication

Franchisers, once skeptical about handing over too much territory, now are seeking out the professionals. And Great Wraps' Kaplan says Kelly is precisely the franchisee everyone wants.

The reasons are numerous. Having a single franchisee run multiple units streamlines communication, because it's easier to deal with fewer people. Plus, having a savvy businessman at the helm usually means more money, and less work, for the franchiser.

Steve Siegel, chairman of the International Franchise Association, is both a franchiser --- chief operating officer of flower shop Kabloom --- and a franchisee. He owns 32 Dunkin' Donuts franchises.

He says multiple-unit franchising is great if it's done the right way.

Multiunit operators can help a business grow faster, but they also can create problems for the franchiser. Siegel offered the story of a multiunit Burger King operator who got in over his head by opening too many stores and wound up seeking bankruptcy protection.

"It's a little bit of a Catch-22," he said. "If that multiunit operator doesn't do well, it reflects poorly on the chain."

Don Perry, Chick-fil-A's spokesman, said his company still prefers single-unit, traditional owners who plan to run their own stores. He said it helps the company keep closer contact with its managers and, therefore, its customers.

"We really like the concentration on that one location," Perry said. "We look for an individual who is going to operate the location, as opposed to an investor who says, 'I've got the money and I'll buy one of these.'"

Siegel's answer to that problem is to require all of his franchisees to work in their stores for some period. He thinks his time making doughnuts helped him run the Dunkin' Donuts franchise stores.

"If you don't work in the store, if you don't know what's going on in the store level, then you've made a mistake, I don't care who you are," he said.

Jennifer Wang, a Great Wraps franchisee, has been working in her store since she opened it in November. Her history in stocks and international trading didn't prepare her much for making wraps, but it did give her a good base for knowing how to build a business.

Making good money

One morning last week Wang dropped her kids off at school and went to the store to see how her workers were doing.

While they ring up orders, make wraps and serve the lunch crowd, she works in the back, putting together a reorder list and taking care of paperwork.

She sheepishly admits that she doesn't like to eat wraps. The cheese just doesn't fit her Asian-adjusted palate. But that won't stop her from opening another store later this year with her husband, who will quit his international post with a company in Hong Kong.

In two months, they've seen that Great Wraps will make good money for them. And that's why they've signed on.

"I hire people who know much more about food than I do," she said. "I just want to treat my store like a business."