Diversifying your Franchise Portfolio – Exploring a Second Brand
With the trend of multi-unit franchising continuing to drive the industry, many progressive franchisees are looking for the next logical step in their business progression. Many more are finding that next step is through diversifying their franchise portfolio and exploring a second brand.
As a multi-unit franchise operator, you understand the trials of success in building your store count with solid business practices. Franchising works when you’ve validated the right opportunity and you’ve followed a rigorous training program day-in and day-out. Wash, lather, rinse, repeat. This takes at face-value, a brand and concept with staying power, strategic marketing and corporate support – right down to stellar execution and top-notch customer service. The numbers work, and with the right resources in place, you’ve found your niche and are fulfilling your market development schedule. The alternative may be a saturation of your brand with little or no room to grow.
Either way, the notion of expanding your empire with another franchise brand is a natural next step. So, where to start? Well, that’s fairly easy if you’re willing to take the time to turn over many rocks in your next franchise discovery process. There are a ton of resources out there. From numerous franchise publications and multi-unit brand rankings, to the experience of fellow colleagues, the IFA, and several multi-unit conferences throughout the year for networking and exploration. You have been successful for a reason and likely stay current on industry trends and business climate. However, giving necessary time to thoroughly explore your next franchise is often glossed over in favor of, “what is the AUV and the average net profit of this brand?”
Understandably, this is typically going to be your first consideration before all else. Unfortunately, it is also the reason why many candidates looking at a second brand get stuck on this critical topic. They often don’t go any further than asking this same question again-and-again to every new opportunity they’re exploring. Yes, we are all in business to make money and build wealth, but it’s not as simple in round two of “discovery” as one might expect.
As many franchises as there are out there, take the time and commit to learning about three new franchise opportunities. Why three? It is imperative to compare and contrast opportunities with one another – and not just with the current franchise you own. Narrow the field down based around your goals, needs and expectations as you would for any business opportunity. Your strengths should parallel successful business models that are seeking the same operational skill set. Staying within your current industry i.e. restaurant, automotive, retail, etc., can lend itself to making use of your existing resources. Just make sure early on that you are not exploring a brand that would fall into the non-compete clause of your current franchise agreement.
One suggestion I offer to franchise candidates is to write down your questions and ask the same of each franchisor. Where are you growing? Do you offer market exclusivity? What makes this a successful brand, and why will you be relevant 20 years from now? Are you flexible and easy to work with? (Ask “for example” questions). Have same-store-sales increased over the past 5 years? What specifically has changed to affect your sales? What innovations have you made to improve the brand? The list goes on, but ask the same of each.
Every franchisor has its own process for qualification, discovery and franchise award. Keep an open mind in understanding that each follows its own system for granting a new market or multi-unit deal. The exception is that we must all follow the laws of FDD disclosure. The process for obtaining sales, profit and expense information must be obtained in validation with current franchisees of that brand. This takes time and research. Be willing to complete applications, review FDDS, and speak with multiple franchisees from each brand. There are no short-cuts. You will be better off in the long-run if you are thoroughly educated on multiple opportunities, and can be rest assured that you made the smartest selection for your next franchise venture.
Also, keep an eye out for franchises that have been around for decades but have re-tooled for the future. These are typically golden brands that can demonstrate a steady increase in sales with a resurgence and commitment to new growth. They know how to remain relevant and have the experience to open stores and sustain. These brands often provide the best opportunities to open in new markets and grant exclusivity with very attractive entry terms.
Guest editorial shared by Ted Milburn – Director, U.S. Franchise Development at Galardi Group, Inc., franchisor of Wienerschnitzel, Tastee Freez and Hamburger Stand. Milburn has over 25 years of successful sales, marketing and public speaking experience – the past 12 years, holding leadership positions on a select few franchise development teams of internationally recognized brands. Wienerschnitzel, the world’s largest hot dog chain, hired Milburn to lead their domestic franchise efforts and, under his direction, the company is overhauling its franchise marketing tools and increasing its industry trade presence as the company pursues new national growth. For more information on owning a Wienerschnitzel/ Tastee Freez co-brand, visit franchising.wienerschnitzel.com or contact Ted Milburn – Director of Franchise Development at email@example.com.
Founded by John Galardi in 1961 with a single hot dog stand in Wilmington, California, Wienerschnitzel (www.wienerschnitzel.com) is a bona fide pioneer of the limited-service food industry. Today, Wienerschnitzel is the world’s largest hot dog chain and home of America’s favorite Chili Dog. Based in Irvine, California, the parent company, Galardi Group, franchises restaurants throughout the U.S., including Wienerschnitzel, Hamburger Stand, and Tastee Freez. An iconic American brand with a devoted following for over 50 years, Wienerschnitzel is poised for exponential growth, both domestically and internationally. With a refreshed marketing focus, Wienerschnitzel has received tremendous media attention and accolades including Franchise Times’ “20 to Watch” and voted Best Fast Food in Southern California by the readers of Los Angeles Daily News for five years and running. Additionally, the company recently introduced a unique next generation store design featuring a smaller footprint and a lower cost of entry; while the simple menu allows for easy execution and lower food costs. As a family owned and operated company, Wienerschnitzel is in a unique position to always put its franchise partners first and is actively recruiting passionate franchise candidates to grow with the brand during this very exciting time. For more information on owning a Wienerschnitzel, visit franchising.wienerschnitzel.com or contact Ted Milburn – Director, Franchise Development at firstname.lastname@example.org.