When someone starts a franchise location, they are the owner of that business. They’re just paying the licensing so that they can use the branding, products and marketing of the overall franchise. This is similar to a small business, but they don’t have to work on building it up themselves, building brand recognition, finding suppliers and all of the other details that the franchisor will take care of.
There are some major advantages to having multiple franchise locations. One of them is simply that the business model is a bit more resilient. Maybe one franchise goes into a slump while another sees increasing sales. The two balance each other out so that you don’t feel as much pressure as a business owner.
But this works best when the franchises are from the same business – two fast-food restaurants under the same umbrella company, for example. Would it be possible for you to buy two competing franchises? For instance, could you own two different fast-food restaurants that serve similar products to a similar customer base?
What does your franchise agreement say?
It may be beneficial to have multiple franchises, but it’s not always allowed. If you own one franchise already, check the agreement that you signed with the franchisor. It may have a clause saying that you can’t operate other franchises at the same time.
That said, this will usually just be within the same industry. If you want to have one franchise that is an auto repair shop and another that is a fast food restaurant, it likely would not cause a conflict.
But it is very important to know all about the legal specifics of the contract you sign as a new business owner. Consider your legal options carefully, especially if any disputes arise.