Why You Should Consider Multiple-Concept Franchising
Diversification, a recommended strategy in designing an investment portfolio, aims to reduce risk while maximizing return, which is why diversification is poised to become the latest trend in franchising. In fact, of the 450,000+ franchise units in the United States, 53 percent are currently owned by either multi-unit or multi-brand franchisees.
As multi-unit franchisees seek new avenues for growth, increasing numbers of them are adding new concepts to their franchise brand portfolios, because savvy business owners know that it’s best not to put all your eggs in one basket. Below are a handful of reasons why all aspiring or current franchise owners should consider diversifying:
- Industry Change – Sometimes an industry can change due to market forces, technology or unseen events such as COVID-19. If you have all of your investment in one brand and that brand is impacted, it may be a challenge to quickly pivot to another industry if you were not already invested into it.
- Best Practices – You can learn and implement best practices that could be used across industries and brands. That experience can help to elevate your entire portfolio.
- Staff – We know that hiring quality staff can be a challenge, especially when there is limited upward mobility. When you have growth opportunities within your portfolio, it can provide incentive and a future path for your staff to want to stay and grow within your franchises.
- Complimentary Brands – Acquiring customers is a focus every day for a business owner. But just as important is maintaining that customer. If you have complimentary brands or can extend the life cycle of a consumer through a different brand, it helps to drive down the cost of obtaining those customers.
Our franchisees at Kiddie Academy come from various backgrounds, but all have this in common: a desire for work-life harmony, financial independence and building something valuable for their community. Many of our franchisees became multi-concept franchise owners when they opened their Kiddie Academy, while others expanded their portfolios after joining our community.
Rakesh Patel became a Kiddie Academy franchisee after a decade of franchising experience in tutoring. He owns two Kumon Math and Reading Centers, which run mostly in the evenings after school lets out. “As my kids got older and their activities multiplied, we needed a business that was symbiotic with our new schedules,” Patel says. Along with noticing a need in their community for quality educational child care, Patel saw promise in Kiddie Academy’s Monday-Friday, normal business hours schedule.
Patel says his previous franchising experience made his transition to a Kiddie Academy Franchisee much easier – understanding the Franchisee/Franchisor relationship, having gone through the site selection process previously, and even the fundamentals of small business ownership, such as accounting and customer service. Patel also urges others to bring their own experiences to their new franchise – and look for a franchisor who appreciates and welcomes it. “In my experience, Kiddie Academy has been more helpful and flexible than our experiences with other franchises.”
Franchisees Katie and Larry Moore own and operate two very successful Kiddie Academy locations in Chicago’s suburbs, with plans to continue expanding. After experiencing success in the educational child care industry, the Moores decided to expand their portfolio to include a senior care franchise. As Katie Moore says, “My husband was looking for other work options and looked into senior home care and we wanted to franchise due to our success with Kiddie Academy.”
Being involved in another franchise concept gave Katie and Larry a leg up in the new industry. “The business knowledge and knowing the support that you get from a franchise – knowing to choose a franchise rather than just attempt it on our own.” Katie says she and Larry chose to break into a new industry because she doesn’t like to have all of her eggs in one basket. “I would not feel comfortable if my husband and I were in the same industry and that was all we had going for us. At any given moment, an industry can change.”
Aleem Hasham had a diverse portfolio of franchises before he signed on as a franchisee with Kiddie Academy and opened his first location in North Albuquerque. Hasham was previously involved with Cendant (now Wyndham) and Holiday Inn (IHG). He is also currently involved with Chevron through a licensing agreement.
“The decision to expand our franchise portfolio was for a multitude of reasons – the primary being, working within an industry that positively contributes to the quality of the life of the community within which we reside and that is considered essential, even in the midst of a global shutdown,” he says. “Diversification is key in long term investments and planning. Often, we view different industries as challenges as opposed to opportunities. Expansion into a different industry should be viewed as an opportunity learn and grow.”
Jeff Brazier joined the Kiddie Academy franchise development team in 2016. In his role as Chief Development Officer, he works closely with franchise candidates to guide them through our franchise discovery process. Jeff has over 16 years of business development experience. Brazier began his career in the sports industry, with an emphasis on baseball, where he transitioned into business development. Jeff holds a BS from Towson University and MS from California University of PA.