For many franchisees, one franchise isn’t enough. In fact, many franchisees think about owning multiple franchises before they they start franchising. Some step in ready to acquire multiple location within a year or two while others wait a while before asking their franchisor for another. Some franchisees even get into franchising prepared to become ‘franchise masters’, which are like mini-franchisors who help bring on new franchisees in the area. If you’re already a franchisee and thinking about acquiring more franchises, then this chapter is for you especially. If you’re an individual who hasn’t purchased a franchise yet, this is still helpful information in possibly planning your business future.
Say you’re already a franchise owner and you’re sitting back, watching your franchise operate and you think, “Everything looks amazing. My reputation is good, my system is flawless, and my employees are amazing. Heck, even my franchisor loves me.” Everything seems to be in order. You notice your royalty payments rising and your payments being made on time every month. Your banker has also noted how much he loves you. You’re paying back your loan and meeting your payroll, bills, and other needs without anyone having to rough you up for the money. Most importantly, you’re feeling good about yourself. You’re comfortable where you’re at. You’re making a steady profit, but maybe it’s not enough or maybe you want more of a challenge. Before you decide you want the challenge, you have to ask yourself, “Will expanding alter this franchise’s ability to function correctly? Can I juggle two or more franchises successfully?” It’s a big decision, just as big as the first time you opened a franchise and it’s important to note whether you think it’s something you can handle before making the commitment.
While you are researching the possibility of multi-franchise ownership, you will find opinions and research that go both ways on the scale. You will find many people who have had a lot of success owning multiple franchises while there were others who failed miserably. There are many reasons why someone might face success versus failure, and all of those reasons come down to an individual basis. Not every person or business owner is equipped with the ability to manage multiple franchises. Some franchisees invest in the wrong franchises, sometimes the economy or culture changes in an area and what was once a popular businesses suddenly went out of taste.
Since the success of owning multiple franchises is not something that can be determined at a glance. It all depends on the businesses you choose to invest in and the amount of work you’re willing to put into your business’s success. In some cases, where you put your franchises plays a big roll in the success of the overall location. If the market you choose to place your franchises in is over-saturated with your industry or if it has no interest at all. You will also have to consider the name of the franchises you want to mix and how big they are. The bigger, more successful franchises may not always promise more success and less work. Look a the failure rates of any franchise you’re looking into and find out what made them fail in order to insure a better change that you will succeed.