5 Ways Multi-Brand Franchising Could Be Your Umbrella in a Stormy Economy

By: Chris Buitron
Published: December 10th, 2021

Between The Great Resignation and a changing economy, more people are considering new career options. While a high percentage are starting businesses, others are buying into established franchise brands and becoming franchisees, with a growing number starting off with a single unit of a brand and investing in more as they find success.

The next phase, which is growing in popularity, is becoming a multi-brand franchisee. As franchisees become successful owning and managing their first franchise, many look for new avenues of growth. Multi-brand franchising can be a lucrative option and has become a growing trend for franchisees looking to diversify – and franchisors are responding in kind by adding multiple brands under their corporate umbrella.

While it’s not for everyone, for the right kind of entrepreneur the benefits of being a multi-brand franchisee are many. However, while fast-growing multi-brand franchising creates exciting opportunities, it can also present extra risk. Nevertheless, franchisees considering expansion through multi-brand growth can experience the following benefits from investing in a multi-brand franchisor:

• A centralized and knowledgeable support system. The existing infrastructure needed to support one franchise can often support other business units in the franchisor’s other brands, such as human resources, accounting, and operations. Multi-brand franchisors offer franchisees access to a wide breadth and depth of knowledge. Their head office staff has experience in different business models and can pass that on to their franchisees. Existing franchisees can get up to speed quickly with the new brand because of their experience and familiarity with the franchisor’s practices and training procedures.

• Cross-selling opportunities. Brands operated by the same umbrella franchise and aimed at the same customer provide cross-selling opportunities that can gain business for all of those brands. A customer who trusts someone from one company will welcome recommendations from that company’s representative about another brand within the franchise. This cross-recommendation system works as long as the umbrella company maintains high standards across all of its brands.

• Borrowing resources. Given the staffing shortages that are plaguing many industries, being able to use some of the same employees for different brands without compromising overall efficiency is important. With two or more brands, a franchisee can offer employees cross-training and an expanded growth path as their skill sets improve. This helps attract and retain talent.

• Diversification and protection from economic slumps. In an uncertain economy, operating brands in different market segments can balance each other out if one sector gets hit harder than another. If a multi-brand franchisee sees one of its brands performing poorly, they can use revenue from their other brands to stay on an even track. Rather than adding more units of the same brand, it makes sense to reduce risk by investing in a second brand that doesn’t compete with the first.

• Excitement. Franchisees with high energy and enthusiasm relish running different brands. It captures their entrepreneurial spirit in dealing with challenges, learning and running different businesses, growing them for the long haul to build wealth for retirement, and increasing their relationships with employees and customers.

Bottom line

Multi-brand franchising has grown significantly in the past few years. As more people consider new options to solidify their financial future in our changing economy, this trend doesn’t figure to slow down anytime soon.

Chris Buitron is CEO and president of Mosquito Authority, a mosquito control franchise serving communities across the U.S. and Canada. His extensive background in franchising includes serving as CMO for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco, where he supported the company’s 4,700 franchised and company-owned retail facilities across 23 states.

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