Owning one franchise can be profitable. But can you make even more money with multiple franchises? Whether you can expect to experience scaled success with several franchises can depend on several factors. Here are examples of some of those factors that you should consider regarding this business decision.
Consider the Scaled Business
Owning one franchise can bring many challenges. Holding multiple franchises can significantly increase those challenges. Learn more about the challenges that franchisees of various locations often experience. This will help you determine if you’re ready for the change. Learning more about common roadblocks that franchisees encounter when opening multiple locations can also help you to be more prepared to face those challenges if you also decide to branch out your investments.
Compare Multiple Units vs. Separate Companies
According to Buying Multiple Franchises: A Path to Success, you should review the pros and cons of investing in multiple similar units or separate franchise companies. Major revenue differences could exist between both options. For example, if you’ve had financial success with a particular franchise, you may benefit from exploring the possibility of opening the same franchise in another community. This may be a wise choice because you already know how to run that franchise, which can help you hit revenue goals sooner with the second unit.
Review your Experience
How much experience do you have as a franchisee? Your experience as a franchisee should influence your decision of branching out to another location. It should influence your decision because more experience can equal more money. For example, opening multiple franchises as a new franchisee may be too much to handle. On the other hand, branching out to various locations after several successful years as a one-unit franchisee may be the wiser option for experiencing continued success.
Review the Market
The local market where you want to open another franchise will majorly impact whether you’ll make more money with this move. While you may be successful with your first franchise, the success of a second location will depend on how many similar franchises are in the area, the consumer demand for such a business and more. The more upfront market research you do, the wiser of an investment you’ll make.
Track Strengths and Weaknesses
What are the strengths and weaknesses of your current franchise? Also, what are your personal strengths and weaknesses as a business owner? Tracking and reviewing these details is essential for continued business success. For example, by knowing your strong and weak points now, you can improve upon what isn’t working well and build on your strengths as you branch out to other franchise opportunities.
You can make more money with multiple franchises, but several factors can impact just how much you’ll make. Consider whether you should invest in multiple similar units or separate companies, review the market and more to make an informed decision.