Guide to Buying Another Franchise: Build Your Scale Plan

Erin Snyder, vice president of franchise development with Handel’s Homemade Ice Cream, has a great deal of experience in working with franchisees looking to expand their entrepreneurial empire. When they come to her for advice, she breaks down the process into the three steps: determine why you want to expand, decide what you want to expand with and make a plan for how you will execute the expansion. This guide delves into these aspects to help you build an effective scale plan.

Why Do You Want to Expand?

Understanding your motivation for expansion is crucial. Knowing why you want to grow your business ownership domain can shape your entire expansion strategy. There are many valid reasons for wanting to expand.

“Maybe they’ve got a business that they've started, and they're seeing a good return from that business and thinking, ‘I want to do this again. I want to duplicate this,’” Snyder said. “Some people want to expand with the brand that they're currently with, but do they have an opportunity to be a multi-unit franchisee with that existing brand? Or do they want to look at actually expanding over into a different brand and diversifying. The cool thing about franchising is there's a model within franchising that works for each of those different levels.”

Once you come to terms with what your motivation is, you’ll have a better understanding of your goals and how to achieve them.

What Do You Want to Expand With?

Choosing the right franchise to expand with is the next step. Snyder points out the variety within the franchising world, from quick-service and sit-down restaurants to service brands. However, one of the most important considerations is finding a brand that is complementary to your existing business and operations. What makes one concept complimentary to another can vary from person to person — consider busy times, busy seasons and transferable skills — but definitely consider how the two can work together.

“For example, if you’re currently in food, maybe you should look at something in service,” Synder said. “Or you really love the food sector and you currently have a daytime food concept — maybe you're a breakfast franchisee — and now as you expand you're going to go with a brand that is busier at nighttime. Then your team is able to work both of those concepts versus having two day concepts where you just feel really strapped during the morning.”

Expanding with a different, yet complementary, franchise, allows you to diversify the risk in your investments. And every franchise model is different, so be sure to consider your preferences for things like level of support versus your desired amount of independence.

Once you have found a suitable franchise that you’d like to scale with, you’ll need a plan in place to do so effectively.

How Do You Expand?

"The number one thing that I feel like the franchisees will miss as they're looking to expand is having the capital that's necessary," Snyder said. 

Understanding the financial commitment and preparing for initial losses is vital for long-term success. Operational efficiency is another cornerstone of successful expansion. Evaluate your current team and identify who can manage new locations. This ensures that your existing business remains stable while the new one gets established.

Additionally, sourcing and training new team members is crucial to fill any gaps that will be created with your expansion.

By following these guidelines and leveraging the expertise within your franchise network, you can build a robust and scalable franchise portfolio. And if you need a little more support, lean into the support system provided by the franchisor and fellow franchisees — it’s a built-in network that wants to see you succeed. 

“Franchising is going into business for yourself, but not by yourself,” Snyder said. “The franchisor has the experience to know what to do and what not to do. But in addition to that, franchisees really get the benefit of being part of the system by leaning into the insights of other franchisees. There's some guy out there that was a one-store guy for this brand and he's now a 10-store guy; he knows what it's like to be you and what it's like to grow.” 

Interested in learning more about franchising? Check out these resources on 1851 Franchise:

• Top Franchise Suppliers: Consultants To Empower Your Growth Plans
• 1851 Growth Club
• Emerging Trends in Affordable Franchising