Picture this: You start your very first franchise and experience better-than-expected success. You love the concept and you love your customers. But, you still have the itch to keep moving forward. You want to try something new but you’re not ready to leave behind what’s already worked so well to provide for you and your family. What do you do? You might consider becoming one of the many who enter the world of multi-brand franchising.
What Is Multi-Brand Franchising?
Multi-brand franchising is exactly what it sounds like. It’s opening up several franchises under different brand names.
This is quite different than owning multiple franchise locations. Instead of operating under one umbrella, each franchise operates individually. Each brand might have a different concept. Each store might have a different target market. Multi-brand franchising means having one operator opening very different businesses.
Why Has This Become Such a Hot Strategy?
Many people who enter the world of multi-brand franchising do so to scratch an itch. More commonly, they do so to diversify their income.
When it appears that one franchise has reached its potential in your market, you might feel as if you have a well-oiled machine running that doesn’t require as much of your time. You might also feel a little stuck. Multi-brand franchising lets you grow, while simultaneously exposing you to new and exciting business challenges.
Benefits to Multi-Brand Franchising
The benefits to this approach cannot be ignored. The upsides are plentiful, which is why multi-brand franchising has become such a popular approach.
You Can Operate Seasonal Businesses Without Seeing Seasonal Drops in Revenue
If your franchise experiences seasonal highs and lows, you probably want a little more stability in your revenue stream. Multi-brand franchising can give that to you. By opening up a second franchise (or third, or fourth), you could diversify your revenue streams enough to cover the gaps during the slow seasons.
You Can Co-Promote
If your brands complement each other, you have a chance to co-promote your business, giving you an even stronger leg up against the competition. For example, if you plan to open an Ace Hardware franchise, and you also own a Fresh Coat franchise, you can sell your services to customers who are renovating their house.
You Can Use Your Existing Knowledge to Grow Faster
If you’re keeping your variety of brands in the same industry, you already have a strong pulse on what’s happening in your market. For example, if you own one restaurant franchise and are gearing up to open a second restaurant franchise, you’ll already have an idea of the type of staff to hire, where to find them, how to retain them, and more.
This knowledge base works in your favor, acting as fuel to your new franchise’s fire. For every brand you add under your franchise ownership belt, you learn more and can continue using those lessons to grow your future endeavors faster and more effectively. You won’t make the same mistakes you did in the beginning, which puts you leaps and bounds ahead of the competition, even when entering a new business.
Is Multi-Brand Franchising For You?
There are many benefits to this approach but it’s not for everyone. We don’t recommend opening several new brands of franchises at once. But, if you’re a successful franchise owner looking for new ways to add to your cash reserves, multi-branding is worth considering.
Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.