Franchise candidates are often presented the opportunity to become a multi-unit franchise owner when in discussions with a franchisor. Most of the time, the option is to open multiple units of the same brand. However, it’s also possible to become a multi-unit franchise owner that owns different brands, whether they are operated by the same franchisor or not.
As a franchise business consultant, I want franchise candidates to understand all of the options they have available for them to live their entrepreneurial dreams. And while most candidates are excited to either open a single unit or multiple units of the same franchise brand, multi-brand franchising has its advantages.
Here are answers to several of the questions people ask about multi-brand franchising to know if it is right for them.
Why would I want to do multi-brand franchising instead of multiple units of the same brand? There are several reasons to consider multi-brand franchising.
Economic Stability: If you own a franchise brand that is cyclical in nature, like lawn care or tax return preparation, investing in a franchise brand with steadier business could make sense. Or perhaps you own a franchise that does very well during economic prosperity, so you add a brand that is recession-resistant.
Brand Loyalty: Another reason to consider multi-brand franchising is if you’re in a business that is extremely brand loyal. If you know that customers of Brand A almost never switch to Brand B and vice-versa, owning both brands allows you to capitalize on both markets when that otherwise wouldn’t be possible.
Marketing Synergy: Finally, some brands have terrific synergies, allowing you to pool resources for the value of each brand. Using our fitness boutique example, owning multiple brands that focus on different styles of exercise can be extremely lucrative if used to create a holistic approach to health and wellness.
Market Growth: If your current franchise unit has already maxed out its potential in one market, opening up a different brand can allow you to grow your company revenue without having to expand into another area. For franchise owners that have worked hard to learn and ingrain themselves into a community, adding a second brand in that community is more appealing than working their way into a new area.
Personal Challenge: Franchise entrepreneurs get excited about the idea of new challenges. The spark that took them away from traditional employment can also steer them towards launching a new brand when they feel restless or satisfied with their current brand.
Does multi-brand franchising mean I’ll have two different franchisors? Not necessarily. Several franchisors take the concept beyond one successful franchise brand and apply it to more. For example, a franchisor in the boutique fitness industry may take their successful model for an indoor cycling studio and decide to use that same model to open a Pilates studio. A franchise system that specializes in resale clothing may have a brand for women’s clothing, another one for children’s clothing and yet another for furniture or technology.
Are franchisors okay with me owning competing brands? In most cases, yes, but each franchise system will have its own rules regarding multi-brand franchising. That’s something we can explore together.
Will I have to have hire completely different staff for each brand I own? It depends on the franchises. Your back-office infrastructure may be able to handle the operation of all of the brands. You may even be able to have the same in-store operations staff as well — if the skills and training required for each brand are similar.
Can I start my franchising journey as a multi-brand franchise owner, or do I need to work my way up to that? Multi-brand franchising within the same franchise system right away isn’t much more challenging than multi-unit franchising of the same brand. However, if you’re just beginning life as a franchise owner, it’s inadvisable to launch two brands from two separate systems at the same time. Becoming a franchise owner is a major life change, so launching with one franchisor at first lowers the chances of becoming overwhelmed.
How can I learn more about multi-brand franchising opportunities that are right for me? Whether you’re just starting to explore franchise opportunities, or you already own one or more franchise units, I’m here to help you figure out how to turn your small business into a multi-brand empire. You can give me a call at 919.846.7111 or email me at firstname.lastname@example.org. Or you can schedule a 15-minute phone call by clicking the button below.