can i own multiple franchises

by Jammie Luettgen PhD Published 2 years ago Updated 1 year ago

If you wish to do so, you can:

acquire additional franchises within the same network (and become a multi-unit franchisee); or
purchase franchises from other businesses (and become a multiple single-unit franchise holder).

A clever business person can certainly own more than one franchise, and there are several ways to go about this. A multi-unit franchise is one in which the franchisee agrees to purchase and run several (or many) franchises of the same type.Sep 22, 2021

Full Answer

Can I own more than one franchise at a time?

The franchise agreement that you signed when you joined the franchise may expressly prohibit you from owning other franchises or becoming a multi-unit franchisee, as the franchisor may want to encourage competition within the network. If multi-unit franchising is allowed, you may still be required to:

Can a franchisee devote the whole of their time to business?

Some franchisors want to recruit franchisees who will both own and operate the business. In these kinds of franchise businesses you will probably find a clause in the franchise agreement requiring the franchisee to devote the whole of their time and efforts to the business.

What are the benefits of owning a multi unit franchise?

Owning a multi-unit franchise means you become a bigger fish in the same pond. Owning more units gives you greater influence in the network, as voting rights on decisions within the network (for example, whether to audit the marketing fund) are attributed to the number of franchise units a franchisee holds.

How to buy a franchise with a family member?

Tip: When you’re contemplating the purchase of a franchise, family members really need to know-and need to understand what you’re thinking about doing. So get your spouse/significant other involved early on in the process. Money. That’s why. Mostly. ( I say mostly, because there could be a bit of ego involved in owning multiple franchise units .)

What is it called when you own multiple franchises?

A multi-unit franchise model allows franchisees to operate more than one restaurant unit in a given territory. A franchisee may own the right to operate multiple units of the same brand or operate restaurants for several different franchisors.

Can you own competing franchises?

Some franchisors may not restrict you from operating a competing franchise as long as the competing franchise is not within a specific distance. Owning competing franchises can be beneficial in that it gives the franchisee the opportunity to offer variety and expand customer base.

Can owning a franchise make you rich?

The bottom line is that while a franchise can make you independently wealthy, it isn't a guarantee. Choosing the right business in the right industry, and going in with preexisting entrepreneurial experience and/or existing wealth can help, but your income-generating potential may still be somewhat limited.

How much do franchise owners make a year?

According to a survey done by Franchise Business Review involving 28,500 franchise owners, the average pre-tax annual income of franchise owners is about 80,000 dollars.

Is it illegal to own two competing companies?

In the U.S. it is perfectly legal to do so.

Can I start a competing business?

If you have not signed a non-compete agreement, you are entitled legally to start a business in the same industry as your employer.

What franchise is the most profitable to own?

Most Profitable FranchisesDunkin'7-Eleven.Planet Fitness.JAN-PRO.Taco Bell.Orangetheory Fitness.Great Clips.Mac Tools.More items...•

How long before franchise is profitable?

One common misconception when it comes to operating a franchise is that once you sign on the dotted line and open for business, the customers and revenue will start flowing. This is typically not the case. It normally takes a year or two to become profitable.

Is it hard to run a franchise?

Running your own franchise is still hard work, and there are drawbacks to opening a business that requires operating by someone else's rules.

How often do franchises fail?

A five-year study by the franchise consulting firm FranNet reported that 92 percent of their franchise placements were still in business after two years and 85 percent after five years. Because yes, sometimes franchise businesses can rise and fall like independently owned companies.

Is owning a franchise a full time job?

Buying a franchise doesn't have to mean making a full-time commitment. Believe it or not, there are many franchises that can be run on a part-time basis, especially when you first start out.

How many hours do franchise owners work?

Owning a franchise unit can be demanding, requiring work of 60 to 70 hours a week, but owners have the satisfaction of knowing that their business's success is a result of their own hard work. Some people look for franchise opportunities that are less demanding and may only require a part-time commitment.

Can a shareholder start a competing company?

WHEN CAN A PART-OWNER LEAVE AND START A COMPETING BUSINESS? Generally, part-owners of a business, operated through a corporation or limited liability company, are free to leave and start a competing business.

Can you own multiple Chick-fil-A's?

With Chick-fil-A you can not own multi units. We have heard there are a few operators in the system that own a couple of stores but apparently franchisees need to be an owner for over 10 years and have your store in the top 1/3 to be considered.

Why does it cost 10k to own a Chick-fil-A?

The franchisee only pays the $10k franchise fee. Chick-fil-A pays for (and retains ownership of) everything — real estate, equipment, inventory — and in return, it takes a MUCH bigger piece of the pie. While a franchise like KFC takes 5% of sales, Chick-fil-A commands 15% of sales + 50% of any profit.

Can you buy Krispy Kreme franchise?

Getting into a Krispy Kreme franchise is not inexpensive. Franchisees can expect to spend anywhere from $440,000 to $4.1 million in initial investment fees, depending on the type of store format they choose. In addition, franchisees can expect to pay 4.5% in net royalties, payable each week, according to its FDD.

What About Owning Multiple Franchises From Different Networks?

Instead of multi-unit franchising in the same network, you may decide to purchase multiple single units from different franchises. You may still face restrictions from your franchise agreement, particularly when it comes to owning similar or competing businesses, so it is important to understand your legal obligations and rights before taking action.

Why is it important to own a multi unit franchise?

This is because your units may compete with each other. The risk of over-saturation becomes more important to address when purchasing or setting up new franchise units as opposed to existing ones, since you may take business away from your current businesses.

What Are the Risks of Multi-Unit Franchising?

Despite the potential benefits that you may gain from having multiple franchises in the same network, you should also be aware of some potential risks before purchasing additional units. The key risks you may face are:

What does it mean to own more than one franchise?

Owning more than one franchise location is not for everyone, but it often fits the growth, revenue and profitability goals aspired to by some franchise owners .

Why do franchises exist?

Owning individual franchise locations can provide opportunities for entrepreneurs to achieve business success while making a positive economic impact in their local communities. But once a franchise owner has reached a certain level of success, it’s natural to wonder whether owning more locations would benefit them.

What is multi unit ownership?

Multi-unit ownership requires the ability to communicate consistent messages to more people in different locations, the ability to find even greater cost savings, and the marketing and advertising insight to best leverage each market area around each location.

What are the advantages and disadvantages of buying a franchise resale?

Alan Wilkinson writes: Franchise resales may come about for a number of reasons. Often a franchisee will... read more