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How Do I Give Enough Love to My Second "Child?"

Tips on Avoiding Failure When Opening a Second Franchise Location

By James Miller<p>1851 Contributor</p>
SPONSORED 2:14PM 01/17/17

You bring your first child home. It is exciting and also extremely scary. Let’s be honest, you are relatively clueless when that first bundle of joy comes along and you figure out how to be a parent along the way. If you decide to have a second child, it should be easy because you have been through it all before, right? But ask any parent with two children and you’ll quickly learn – that just isn’t the case. There is even more to learn as you juggle being a parent of one baby to being responsible for two little humans.

The same can be true with opening that second franchise location. You put a ton of sweat equity into the first location to make it grow while enduring tiring days and sleepless nights along the way. Once you are ready to branch out to a second, you need to press the reset button and be prepared to learn how to do things differently.

“The biggest misconception people have about opening their second location is that since they have done it successfully once, the winning recipe will automatically spill over to the second location,” said Scott Oaks, 1851 Franchise Vice President. Oaks has worked in senior leadership roles in franchise development his entire career and now works with franchisees and franchisors to help set them up for success.

“You have to have a serious look at why you are successful,” Oaks added. “Was it because you were an effective micromanager, or did you do a good job building a management team and let them do their job? Either way, going from one to two locations, you have to realize that you can’t be at both places at the same time. You have to make an adjustment and take a very serious look at the people you are hiring and step back from the day-to-day. For some people, that can be very difficult.”

Jamie Cecil is the Director of Franchise Sales and Development at Beef ‘O’ Brady’s, a family sports pub franchise with over 220 units, and The Brass Tap*, an upscale craft beer bar franchise with 35 locations nationwide. Over his career, he has witnessed franchisees rush into the second location.

“That is the problem,” Cecil said. “There is a honeymoon period in this business. There is going to be a drop in sales and you have to be ready for it. If you go to open the second location without the systems and people in place, you are asking for failure.”

The average time it takes to open a franchise, according to FranChoice, can be a full year. With that in mind, you need to make sure that you have a proper timeline set up to assure (as much as possible) the success of a second location.

“You have to have the components of a good franchise built first so you aren’t in construction while you are still learning the business,” said Eric Anthony, who owns six Hand & Stone Massage and Facial Spa franchises with his wife. The Anthony’s Greensboro, North Carolina location led the franchise with the highest sales of any of the chain’s nearly 300 locations this past year. “In a service industry business such as Hand & Stone, if your first location is on path to attaining a 20 percent return and the business is growing, then you should look to expand. If you are not hitting that, then don’t take the risk for 10 percent or less. My target is two and a half to three years. If I’m tracking towards that, then I would look at new locations.”

“It takes planning, organization and delegation to make sure that second location succeeds,” added Oaks. “Before a franchisee even thinks about signing an agreement for a second location. They need a detailed plan on the first one to make sure it doesn’t falter when they adjust their focus on the second one. The owner needs to take a step back and rely on strong managers to lower the risk of failure.”

Anthony believes that it comes down to knowing the business model in-depth.

“You have to really dive deep into the model and finances. The biggest mistake I see is when someone says, ‘I don’t understand numbers’ and they hire a CPA and bookkeeper and let them handle it and the franchisee doesn’t have a clue about what is truly going on in their business,” Anthony said

Oaks also said that franchisees should have the same expectations for their second locations as they did for their first.

“Expectations should be the same as it was in the first location,” said Scott. “When you open the doors to your first location, the initial 18 months you are 100 percent dedicated to working 70-80 hours a week. As it becomes successful, you dial it back a little. As you go to open the second, you need to readjust your mentality—to be like when you opened the first. It might seem easier because you are smarter, but trust me—it will be just as much work.” 

Cecil added, “You have to be flexible and realize the experience and path to success for your first location will not necessarily be replicated in the second one. You need to learn and don’t repeat mistakes.”

Much like children, no two locations are exactly alike. You have to prepare to adjust your attention and put in the work. If you position both of them the best way that you can, you are setting yourself up for success.

*This brand is a paid partner of 1851 Franchise. For more information on paid partnerships please click here.