Tips for buying an additional franchise
Thanks to their impressive success rate and huge potential for profit, franchises are an incredibly popular option for entrepreneurs looking for a new challenge. And once a franchisee has experienced success with one business, they are often tempted to take on a new challenge to build further on their success.
Though there are generally no rules against buying an additional franchise, entrepreneurs taking on an extra franchise need to think carefully before they take the plunge. Without a considerable amount of thought and planning franchisees could risk putting their original franchise in danger.
Time Management
As all franchisees will now, starting a new venture takes time. In order to ensure that they don’t neglect their existing business, entrepreneurs need to find a new venture that they can fit around their current franchise.
Part time businesses such as child after school franchise opportunities and can be viable options for ambitious franchisees, especially if their current business is also part time. Seasonal franchises, like summer camps, some types of landscaping franchises and outdoor food stands, can also be a good fit for franchisees thinking about buying an additional franchise, though they may result in the franchisee working long hours at certain times of the year.
Legal considerations
Depending on the type of additional franchise an entrepreneur wants to invest in, they may need to take some legal points into consideration.
It’s always a good idea for franchisees to check their current franchise agreement for any clauses that could prevent them from investing in a new venture. Some franchise agreements require franchisees to seek permission from the franchisor, while others may rule out extra investments altogether.
Selecting the right business
When investing in an additional franchise, entrepreneurs need to do the same amount of research as they would if they were buying into a franchise for the first time.
Market research will help investors to identify any potential gaps in the market and help them to decide whether or not there’s a demand for the products or services they would be offering. Entrepreneurs also need to talk to existing franchisees to learn more about the franchise and to find out if there are any long standing issues with the business.
Ensuring success
Once entrepreneurs have found the perfect franchise opportunity and done all the work that they can to ensure this is the right franchise for them, the next stage is to make the investment and start on the long road to success.
If franchisees have a reliable manager or co investor who can take care of their existing business, this will free up the time that they need to focus on their new venture.
Though buying an additional franchise while retaining ownership of an existing venture can be a challenge, investors willing to take the risk could benefit from a big increase in revenue, a rewarding new challenge and a second successful business.