QSR Magazine: The Benefits of Multi-Brand Franchise Ownership

The world of franchising has long succeeded by giving regular people the chance at achieving the American dream and owning their own business. But while franchising can lead to small-scale, mom-and-pop success, it can also lead to widespread, long-term success for those franchisees that strategically diversify their portfolio with multiple brands.

Take, for example, Atlanta-based GPS Hospitality, which got its start in 2012 when a group of former Arby’s employees purchased 42 restaurants from Burger King corporate. The franchisee, which now numbers more than 200 Burger King stores, recently opened seven Popeyes Louisiana Kitchen units as a way to spice up its portfolio, says Scott Jasinski, CFO of GPS Hospitality.

“It provides the same upside potential and downside protection that any individual investor has with a diversified portfolio,” Jasinski says. “From a return-on-investment standpoint, a company can maintain much more consistent results … when you have [multiple] brands.”

Although a diversified portfolio can strengthen a company, franchisees must weigh the initial and ongoing costs against the revenue potential. Capital investment, operational strategies, site location, and financial models vary from brand to brand.

“It’s not easy. … It’s harder than being a single franchisee,” says Clyde Gilfillan, a North Carolina–based consultant with more than 25 years of experience in the foodservice industry. Veteran franchisees are better suited to take on a multi-brand portfolio, he says, because they’re more in tune with the nuts and bolts required to run the business.

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