The franchise you own is more than a business — it’s an investment. Standard financial advice states you shouldn’t put all your eggs in one basket, and by sticking to only one franchise brand, some experts believe you’re doing precisely that. Still, adding another brand to your portfolio is not something to take lightly. So, how do you know when to take the plunge?
Is Your Portfolio Ready For A Second Franchise Brand?
Before adding a franchise brand, every owner should examine their finances, skills, and bandwidth. Can you afford to start a new franchise? Remember, the overhead costs will likely be higher than opening another location for your existing franchise. Further, will your skills transfer to a new franchise — or can you find a franchise that plays to your strengths?
Most importantly, are you willing to put in the time and effort it will take to get a new franchise off the ground? At the same time as you’re learning the ropes, you’ll need to train a management team you can trust with your investment. The process will require passion and dedication, so ensure you’re up to the task.
Your new brand and industry are critical if you decide to move forward. You may think you’re capturing a larger market share by owning two similar franchises, but you risk competing against yourself. Ideally, someone looking to add a new franchise to their portfolio should find a brand that uses similar operation structures while selling different products. If you choose another route, be aware you’re creating a more significant challenge for yourself.
Be cautious about rushing things. You probably didn’t sign up with the first franchise you found when you started your business, and you shouldn’t now. Don’t choose a brand just because you like its product — take time to do the math. And don’t forget to conduct a culture check. You should select a franchise that matches your values and work style.
There are many reasons to add a brand to your portfolio, but the move isn’t right for everyone. Sticking with what you know has its benefits, and some people don’t want to deal with multiple target demographics, suppliers, and different franchise structures. So, weigh your options carefully before taking the plunge — and as always in business, make sure you have an exit strategy in case things don’t work out.
