When Should I Open My Second Franchise?
When Should I Open My Second Franchise?

Learn the signs of a successful first franchise before expanding

Opening one franchise location is a big enough challenge in and of itself, but when you are thinking about opening a second location, it is a whole new challenge. Although you may have learned lessons from your first opening, there are other obstacles you will need to consider as you expand and ways you will need to adapt your operations to be able to juggle all of your responsibilities.

First and foremost, your first location or territory should be successful enough that it can be run without you. If you will be heavily involved in opening the second franchise, you won’t nearly have as much time to spend on operating your first.

Having the right staff in place is also extremely important. Sylvan Learning franchisee Kent Kolbow explains, “Any time you’re expanding, staffing is key. You need to have the right staff in place in your current location before you expand. This is the group that will train everyone at the new location so you should solidify what you have and get the best of the best.”

You will also want to consider having someone you trust from your first location leading the charge for the second. Scott Allis, Miracle Method franchisee, describes the ideal scenario, “If you have a person that’s already on your staff at your first franchise that you trust, that will be important for when you’re not there. Because you’re not going to be able to manage a second franchise like you did your first.”

Your first franchise will also have the responsibility to to support a second while it is first building its momentum, so make sure you first franchise is profitable enough to do that.

“I needed to make sure the centers I had were very stable and that the biggest center could support the new centers for the first few months if they didn’t perform as well as I thought. In case they flopped, my best center could support the others,” said Kolbow.

If you've started to master the system and your first franchise is very successful, the second location will still need funding, whether from yourself or from others. Depending on the position you were in financially when you invested in your first franchise will determine how long it may take to get yourself into a good place to invest in the second. Al Hauck, Buffalo Wings & Rings franchisee advises, “Don’t do it until you’re ready. You have to be ready mentally and financially.”

The location of your second franchise is another important aspect of your expansion plans. Being able to quickly go from one to another without spending too much time on travel will allow you more time for management in an efficient manner.

“Make sure you have the energy levels to do the necessary travel to get to the second location and then work. It can be a full year before you see results so you have to have the time to operate and run two offices at the same time,” said Allis.

Learning from your mistakes and implementing what you have learned when you’re thinking about expanding will be crucial to your success. Since you have done this once before, you know what to expect and you should work on refining the process and applying it to a potentially new market.

Hauck shares a lesson he learned, “Be prepared for high volume. You have to make sure you can still deliver the right guest experience from the start so that they will continue to come back in the future once you got them in the door.”

In the end, you will have to trust that you can replicate what you’ve already done by following the processes you have put in place. Hauck explains, “Don’t be afraid to pull the trigger. If you were successful once, you’ll be successful again.”