Many business owners have discovered the pros of owning a franchise, including having a recognizable and trusted name brand, a model built on a proven system, and an infrastructure that allows for growth. One of the most tried-and-true options for growth in any business is opening additional locations. For franchise owners, this means owning multiple franchises. There are pros and cons to opening up additional franchises that the business owner must think about before moving forward. Here are three things to consider before becoming a franchise mogul.  



Clearly the reason for owning multiple franchises is to increase the potential to earn more money. As business grows, opening another location or expanding can help keep up with demand. With a franchise, this could mean buying rights to a larger territory to serve out of one office, or opening up multiple offices to better serve more customers.


This opens up the potential to increase profitability, especially since many of the services required to run one business or location can be centralized for multiple businesses. For example, multiple franchises can use one accountant, human resources department, or marketing manager, making it possible for them to share overall costs. Additionally, some franchises offer special promotions and discounts for franchisees that own multiple locations. These promotions can further reduce overhead.


However, starting new franchises also costs money. Aside from employee training costs, rent, and other startup costs associated with opening a second location, new franchises need time to begin to make a profit. In the short term, this may require using profits from the existing franchise to help support the new location.


When opening a new location, it’s important to make sure the new location will not cannibalize profits from the original location. If opening a second location creates a dip in revenue at the first location, your franchises may be too close together.



Running a business takes a lot of work. Running more than one business takes even more work. There are more employees to manage, more products to order, and more clients and customers to serve.


Opening up additional locations can signify you’re ready to delegate more of the managerial duties to either a store or regional manager. However, it’s important to make sure you have the ideal candidate to do so. As a general rule, employees are not as invested as owners in the business. If a manager quits, this could mean even more work for you as you search to find and train a replacement while also handling the manager’s tasks along with your own. Before opening up additional franchise locations, it’s important to make sure you’re prepared for the additional workload and have the resources and employees in place to help.


Alternatively, many franchise owners find it difficult to relinquish control of the day-to-day activities in their businesses. With owning multiple franchises especially, it’s important you trust your employees and managers to do their jobs and that you delegate. Business owners who try to do too much of the work themselves oftentimes impede business growth.


A Larger Employee Pool

Once you have figured out how to operate one franchise successfully, you’ll be able to apply the same template to open more. One piece that makes this possible is having a pool of trustworthy employees.


When opening a second location or franchise, you can tap into your existing employees who already know the ropes. These tried-and-true employees can help train new employees and also help manage the new location as it’s getting off the ground.


In contrast, having a larger group of employees may make them harder to manage. Sometimes it’s difficult to find reliable employees who fit the culture of the business. With multiple employees, it may be difficult to find employees who work well together, even if they do fit the culture.


Although the rewards of owning multiple franchises can be great, ultimately there are a number of pros and cons to consider before taking on such ownership. Assessing these scenarios beforehand will ensure the additional responsibility is worth the risk.




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