The Top 5 Things I Learned when Launching my Second Franchise Business

I love franchising and the opportunity that it provides individuals to get into business ownership. I became a franchise consultant after almost a decade of being a franchisee to help give people the guidance that no one gave to me.

The journey of an entrepreneur is not easy, becoming the owner of a franchise business is no different. When we launched our first franchise business I never thought about the concept of adding a second brand. Once the business began to grow and I was able to replace myself within the team, utilizing vertical integration to add a second brand into our portfolio became extremely interesting to me.

Last year, we made the leap to add a second home service brand to our operation. Embarking on the journey of owning a second franchise business was a decision filled with valuable lessons and insights. We made a lot of mistakes, but through our failures we also have learned valuable lessons that will help us and others grow! Both of my franchise businesses are in the home services space, but I believe this list can translate to other industries as well.

I'm excited to share with you the TOP FIVE things I learned throughout this transformative experience of adding franchise brand #2:

1. No Two Franchise Systems are Identical: This might seem obvious, but just because you were successful in one business does not mean it will equally translate to the next. Understanding the strengths and weaknesses of the system, evaluating the individuals on the corporate leadership team, and assessing the financial opportunities are crucial steps in making an informed decision. The idea behind vertical integration is being able to leverage your current resources. If the businesses don't align well, you're going to set yourself up for extra trouble.
2. You Must Ensure Stability of your First Business: Any business launch is going to bring about issues. Nothing is perfect, and in the beginning these imperfections can make or break the new business. Before diving into a second franchise venture, it's imperative to ensure that your first business is stable and capable of operating independently, without your constant involvement. This stability provides a solid foundation for the new venture and can serve as a resource if needed. Our first business was able to provide a rent free space for the new brand, for example. This helped remove some of the initial expenses in our start up phase.
3. Avoid Making a Rushed Decision: Patience is key when considering expansion. Rushing into a new franchise opportunity can lead to costly mistakes. It's essential to thoroughly validate the team and the opportunity, steering clear of the fear of missing out (FOMO) sales tactics. Taking the time to make well-informed decisions pays off in the long run. The decision of getting into franchise ownership will either drastically impact your life on a positive note, or drastically on a negative note. There's not much in the middle. It hurts to miss out on a great opportunity, but it hurts way more to be stuck in a bad system.
4. Franchisee Validation is EVERYTHING: Speaking with existing franchisees across various performance levels within the system provides invaluable insights. Engaging with top performers, middle performers, and even those facing challenges offers a comprehensive understanding of the franchise's potential and pitfalls. Beware of franchise concepts who do not encourage you having conversations with current franchisees that are in the system, working the system that has been provided by the franchisor. Don't be satisfied with the weekly group calls hosted by the franchisor.
5. Navigating Vertical Integration Takes TIME: Integrating multiple brands vertically requires a blend of creativity, determination, and patience. It's as much of an art as it is a science, demanding strategic planning and a willingness to adapt to evolving circumstances. You will not have all the answers over night. Launching one business is a daunting task in and of itself. Building a second brand is going to take next level thinking, planning, and mentorship. Find those who have done it before and seek their guidance.
6. *** BONUS *** You need to be well funded if you are looking to add a second franchise brand into your portfolio. When we got started we scraped every dollar we could to put together a deal. In reality, we should have aimed a little lower. Don't get me wrong, I am all about taking risks and going in BIG! But, this is a big decision. When you launch your franchise business, you have a responsibility to not just yourself and your family, but also to your employees, your fellow franchisees, and your community. If you have just enough money to make the minimum level investment, take some extra time and evaluate some lower level investments before writing the check.

Reflecting on these lessons, I'm reminded of the dynamic nature of franchise ownership and the continuous learning journey it entails. As you navigate your own entrepreneurial path, I hope these insights serve as valuable guideposts, empowering you to make informed decisions and achieve success.

As a franchise consultant I help people find launch and build their ideal franchise business. My main goal is to help you get off of zero and become the person that your dreams need you to be. If you are ready to start your franchise journey, or are interested in adding a franchise business to your portfolio, schedule a strategy call today!

Check out The Streetwise Podcast where ever you listen to podcasts for more insight on franchise ownership, navigating entrepreneurship, and building a legacy for yourself and your community!

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