What are the advantages and disadvantages of running multiple franchises?
Among the most successful people in franchising are those who have found a well tuned opportunity and exploited that find by opening many units. And, this makes sense from so many different perspectives.
First, the franchisee gains first-hand knowledge that the business is well run (by the franchisor) and builds a quality relationship based on trust and performance. Second, the franchisee becomes a knowledgeable “operator” within the system and moves up their own organizational ladder by constantly replacing themselves with talent taking on the responsibilities that they must leave behind to move up. Third, as the number of owned units grows (assuming that profitability grows as well), financing new units becomes easier over time. In other words, nothing succeeds like success, and buying a franchise is no different.
Now, I must note that the scene described about is far different from jumping into the franchise industry and purchasing the rights to an area development when one does not have experience with the franchisor or the type of business. Without proper franchise due diligence such behavior can be a quick road to the poorhouse.