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    (FS11) Where Does the Franchise Agreement Fit into Everything?

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    You’ve been running your store for a while so it might be hard to recall the exact wording in the franchise agreement. You’ll be getting in contact with your franchisor if you’re thinking of purchasing another franchise, so you should read up on the agreement to prepare yourself before you talk to your franchisor. You might be surprised to find that your franchise agreement prohibits multi-unit ownership. It’s more common than you might think. Some franchisor’s say that one is the limit—end of discussion so opening another franchise might come down to picking another industry and then you’ll have to read the franchise agreement to see which industries you’re allowed to work in simultaneously.

     

    If you’re newer to the company, but you’re finding massive success and want to start one franchise after another, you’ll want to check with the franchise agreement to see if there are any waiting periods that you have to make it through before they’ll allow you to open more locations. Don’t take these cooling off periods as anything personal, but something for them to be sure that you can run a franchise appropriately and successfully. Some people have a tendency towards zealousness and might try to open more stores than they can handle out of excitement. By refreshing yourself on the franchise agreement, you appear more professional to your franchisor and they are more likely to not only trust you, but to be enthusiastic with you because they know how thorough you are. You leave less to be explained and you’re ready to tackle the project by knowing the restrictions and the requirements that come along with multi-unit ownership.

     

    Reviewing Your Resources

    Having 1 franchise up and running is quite different from having 2 or 10, or 50. Compare purchasing another franchise to having another child. They will be costly, they will have needs, and you’ll need to show an equal amount of love and attention to both. Even though you’ve raised both (or all) of them, they will still have their individual quirks and problems that you were never going to be able to guess.shutterstock_158522159

     

    Paperwork and organization is going to be key to keeping all of your locations in order. The more detailed you are, the better. If you’re not great at organization it’s either time to learn, hire someone else to take care of it, or consider not opening another location because your life will become nothing but a paper-mess without the proper organization.

     

    Are You Prepared for Multi-Franchise Ownership

    There’s no test administered by the franchisor in order to test whether you’re ready to own multiple franchises, but you should still question and test yourself because just like opening one franchise, opening and operating more than one successfully relies almost solely on the personality involved and how well you adjust to all of the shifts in responsibility and extra weight. You might remember these questions from when you were opening your first franchise, but it’s a good idea to refresh yourself and ask:

     

    • Are you a team player?
    • Are you an operator or a manager?
    • Are you organized?
    • Are your family members involved?
    • Can you delegate responsibility?
    • Can you see a big picture?
      • Do they want to be involved?
      • Do you know the difference?
    • Do you think big?
    • Is the timing right?

     

    Take a Look at Your Business and Finances

    You’ve already got some experience under your belt about opening a franchise. You already know what to look for to some extent. As you prepare to open another business, you should think of it in the same way as you did for your first one, just that you’re slightly more knowledgeable this time. Finances are important to opening a new store and in preparations for it, ask yourself these questions:shutterstock_260296172

     

    • Are you feeling competitive pressures?
    • Are your employees ready?
    • Do you have the money?
      • Do you have the support of your employees?
    • Do you have your operations perfected?
    • Does your franchise agreement restrict you in any way?  
    • Is another franchise location in your chain available?
    • Will expansion affect customer satisfaction?

     

    Continue Reading the Franchise Series

    • Being the Owner of Multiple Successful Franchises
    • The Good Versus the Bad in Owning Franchises
    • Crunching the Numbers for Your Many Franchises
    • Researching Different Options for Multi-Franchise Ownership
    • Securing Your New Franchise Location in a Brand New Area