Should You Build A Diversified Franchise Portfolio?

One of the queries several new franchisees raise themselves is “should I be associate degree owner-operator or a inactive franchisee?” we tend to already mentioned the execs and cons of these 2 choices here. However if you’re leaning toward being a inactive franchisee, you would possibly additionally think about building a portfolio.

Basically, some franchisees like better to own and operate multiple franchise units. There square measure2 ways in which they'll like better to do this.

• Own multiple units of an equivalent franchise.
• Own multiple franchised units from completely different brands

Today, we’re attending to point out the second possibility and execs and cons of owning multiple completely different business to make a varied franchise portfolio.

First, the pros:

Owning multiple completely different businesses offers you diversification. kind of like having a varied money portfolio, completely different businesses offer you a security blanket if one in every of them fails or experiences slow growth. Meaning you've got the capital to grow all of your businesses with less risk.

Another professional could be a probability to possess complementary businesses that facilitate one another grow. as an example, associate degree car search and a automobile wash franchise square measure complementary, and because the franchisee, you’ll have the flexibility to send customers of 1location to a different to grow each businesses.

Now, the cons:

If owning one franchise location is tough, owning multiple completely different business is extraordinarily exhausting. It needs tons of labor, dedication and talent to grow multiple businesses with none of them plagued by lack of attention. You’ll got to be a wonderful manager United Nations agency will supervise alternative managers.

You’ll would like associate degree infrastructure of team members and data already in situ. the best reason to open multiple units is as a result of you are doing it quick and with efficiency. If you can’t do this, you’ll have a awfully exhausting time finding success with any of your businesses, not to mention all of them.

Multiple businesses will vie with one another. On one hand, if your completely different businesses square measure competitive in any means, you'll virtually steal sales from one in every of your businesses to grow another one. On the opposite hand, every minute you pay engaged on one in every of your businesses could be a minute you’re stealing from a distinct business. each time and cash get monopolized by the foremost successful business at the expense of the others in most cases.