You have been running a franchise business for many years now. It is profitable. It has a good profit margin. In fact, the business can stand on its own that you rarely encounter problems with it. Your staff can easily manage the needs of the business. So, you think about whether to buy another franchise. After all, you have already recuperated the capital you spend on the first branch. Isn’t it only practical to get the same franchise business and put it in a different location?
When people hear you musing about how to grow your franchise, they’ll probably tell you to go and get the same one. After all, if the formula’s working for your first branch, shouldn’t it work for multiple branches across the country? Doesn’t it make sense for you to bring the brand to other cities?
Location and Market
Are you sure the business is successful because of its products? Or is it because of the location? If your business is located in your city’s main thoroughfare, there is a much bigger chance for it to succeed compared to businesses that are in the suburbs and provinces. Since there are many people exposed to your brand each day, the name recall allows your business to grow faster.
But how do you differentiate the success of your business from the success of the location? First, look at your clientele. Do you have loyal customers? Or do you generate a lot of new ones, but the old ones don’t come back? New customers are always welcome, but they don’t necessarily reflect if you have loyal customers who love your products and services.
If you keep losing older customers to new businesses, it only means that what you have going on for your business is the legitimacy of the location. You are in the right spot. People see and notice your business because they pass by your store every day. They buy products because you are there and not because they love your products. Unless you see customers loyal to your business, bringing the same brand to a less popular location might backfire.
Support
What kind of support are you getting from the franchisor (the one who owns the right to the franchise)? The problem with some franchises is that the moment the franchisees paid for the rights to establish the business, the franchisor will forget about its obligations. The franchisees are, instead, left to fend off for themselves. They have to figure out how to manage the business because they are not getting the support they need from the franchisor.
Before you decide to pay for the franchise rights, make sure that you are getting the support you need from the business owner. A lot of times, you’ll feel that you have been duped out of your hard-earned money. But if the franchisor answers your inquiries, solves problems with you, and guides you in the management of the business, then you can consider starting another one in a different location.
Time Management
Do you still have time to manage a business that’s outside your usual area? Can you still juggle managing two franchises? After weighing your options, the most important question remains: do you still have the time, energy, and resources? The success of a business—whether it’s a franchise or something you built on your own—hinges on how much time you can give it.
If you do not have the time to manage the business, it doesn’t make sense to start one no matter how great the business model is. So, when choosing if you should still buy another franchise business, know where you stand first. The success of your first franchise doesn’t assure the success of your next franchises.
On Starting Your Own Business Instead
Doesn’t the question of starting your own business loom above your head? Isn’t that something that you should consider? If you already had experience handling a business, it may be time to start on your own. What are the problems and solutions that you already identified? Isn’t there something that you can produce out of the problems you see the communities facing?
You have to consider many things when choosing to build your own business or buy the same franchise as your first one. But while the support of the franchisor and profitability of the franchise are top indicators, you should also look into what more you can give the business. Because at the end of the day, it is ultimately your entrepreneurial skills that will judge the success of whatever business you invest in.
