WHAT I WISH I KNEW BEFORE OPENING MULTIPLE FRANCHISES
The top four pieces of advice that can help young entrepreneurs.
By Mike Bidwell, Neighborly
Thirty-three years ago, I was a bright-eyed, young franchisee of a single Rainbow International restoration franchise. I was brought into the Neighborly (formerly Dwyer Group) fold at a young age and within three years, I was one of my system’s top 10 operators. Once I tasted success, I was hungry for more.
When the opportunity came along for me to become the company’s first multi-concept franchisee, I jumped at it. And five years after that, I was ready to open yet another business with a third Neighborly franchise concept. Yet, with each new location came new challenges to overcome, and I quickly learned that the success I experienced with my first franchise wouldn’t be achieved overnight with each new business I opened.
You need to be ready to go from working in your business to working on it.”
To keep a long story short, I learned over time how to successfully navigate the challenges of multi-concept ownership and eventually made my way over to the franchisor leadership side, where I remain today as Neighborly President and CEO.
Now, armed with the combined experiences I’ve had on both sides of a franchise agreement, I often wish I could go back and tell my 20-something-year-old self a thing or two. And one of the biggest learning curves I ever faced was figuring out how to successfully run three different franchises in three different service verticals.
Based on the lessons I had to learn myself, these are the best four pieces of advice I can share with anyone looking to become a successful operator of multiple franchises:
1. Be honest with yourself.
The obvious benefits of multi-unit franchising, such as increased profit potential through saved costs from sharing resources across multiple franchises, are enough to draw in any motivated business owner. But the “why” behind your decision to grow beyond your current brand ideally should be about more than just money. It should also be about learning and growing as a leader. To restate an often-cited cliché, you need to be ready to go from working in your business to working on it. Your focus has to shift from daily operations to a bigger picture look at growth and development, from being an owner/operator to being a CEO. If you’re not already starting to think this way before expansion, then you need to slow down. The most profitable sales dollar you will earn is the next sale in your existing brand.
2. Take a critical look at the state of your current business.
While franchising gives you the benefit of following a proven system for success, each franchise system or new location comes with its own nuances that will need to be addressed. With more locations comes significantly more operational issues to control and manage, and even more so if the new location you’re opening is part of an entirely new franchise concept. It is not worth your time or resources to run two mediocre franchises in place of one outstanding franchise. Make sure that you have all the kinks worked out
in your first location to avoid spreading yourself too thin. The biggest mistake you could make is to assume that opening a new franchise will fix any of your current franchise’s problems.
3. Beware the “danger zone.”
If you do decide that opening more franchise locations is the right move for you, then let me be frank about how you should set your expectations: It is unlikely that you will replicate the same magic you experienced with your first franchise. When venturing into multi-unit or multi-brand ownership, it is quite common for income to initially decline while your workload simultaneously increases. The time it takes for you to develop an additional layer of overhead and infrastructure to be successful can be considered “the danger zone.” Of course, finding yourself in this position isn’t a death sentence. Initially, you can minimize the issue with working longer hours yourself and/or with an excellent management team. But overcoming this state of limbo means realizing you can’t rely on just doing more of what got you there.
The biggest mistake you could make is to assume that opening a new franchise will fix any of your current franchise’s problems.”
4. Learn to let go.
If you’ve been a true owner/operator through your entire franchise experience thus far, it can feel like your business is your “baby.” When you’re that close to something, it’s hard to take your hands off the wheel. But as you grow, your hands-on method has to transition into recruiting the right kind of leadership, training those leaders to your standards, and eventually delegating. By pairing the best practices you’ve trained your team to operate by with the right resources in the right places to help them succeed, you will learn to trust your staff to keep things running smoothly when you’re not around.
For those of us who have found careers in franchising, we’re fortunate that this business model has truly limitless potential. From once being in this same position myself, I know how rewarding it can be to see your business grow. With sustainable growth as the ultimate goal, heed this advice to make sure you don’t get ahead of yourself.
Mike Bidwell is President and CEO of Neighborly, the world’s largest parent company of 21 home service brands focused on repairing, maintaining and enhancing consumers’ homes and businesses. Find out more about Neighborly here.