Multi-Unit Franchise Experts

What are examples of multi brand franchising?

Many franchised businesses benefit from engaging in multi brand franchising opportunities.  Multi brand franchising is a strategic business approach that involves a franchisee owning and operating multiple franchise units of different brands within the same or related industries. This model has gained significant popularity in the franchising world because it allows entrepreneurs to diversify their investments, reduce risk, and expand their presence in the market. Here, we explore the concept of multi brand franchising and provide examples of successful multi brand franchisees and their diverse portfolios.

Understanding Multi Brand Franchising

Multi brand franchising takes the franchising concept a step further by allowing franchisees to own and operate multiple units of different franchise brands. The key idea behind multi brand franchising is diversification. By investing in multiple brands, franchisees can spread their risk across various industries, market segments, and geographic locations. This approach can be particularly attractive for experienced entrepreneurs looking to expand their business portfolios without relying solely on a single brand’s success.

Examples of Multi Brand Companies

Below is a list of franchise companies that benefit from multi-brand franchising.

Yum! Brands

Yum! Brands

One of the most well-known examples of multi-brand franchising is Yum! Brands, which owns and operates several popular fast-food chains, including KFC, Taco Bell, and Pizza Hut. Yum! Brands' strategy involves having franchisees who operate multiple units of different brands within their portfolio. This allows them to benefit from the diversity of offerings and customer bases while leveraging their expertise in the quick-service restaurant industry.

Focus Brands

Focus Brands

Another major player in the multi brand franchising space, Focus Brands owns a variety of brands, including Auntie Anne's, Cinnabon, Moe's Southwest Grill, and Jamba. Focus Brands encourages franchisees to explore opportunities within their brand portfolio, enabling them to serve different customer preferences and market niches.

Roark Capital Group

Roark Capital Group

Roark Capital Group is an investment firm known for its multi brand franchising strategy. They have invested in and acquired a wide range of franchise brands, such as Arby's, Jimmy John's, and Massage Envy. By diversifying their investments across various industries, Roark Capital Group has become a prominent player in the franchise world.

Peterson Companies

Peterson Companies

Peterson Companies is a real estate and development company that has ventured into multi brand franchising. They own franchises in the food industry, including Subway and Taco Bell, as well as other businesses like gas stations and convenience stores. This diversified approach helps them navigate different market conditions and consumer demands.

FAT Brands

FAT Brands

FAT Brands, an umbrella franchisor of food franchised businesses, has combined Fatburger and Buffalo’s Express to share overhead costs, employees and more. Other franchises under the FAT Brands umbrella include Round Table Pizza, Marble Slab Creamery, Johnny Rockets, Hurricane Grill & Wings, Great American Cookies, and Ponderosa & Bonanza.

Multi Unit Franchise Ownership

Many individual franchisees also engage in multi-brand franchising. For instance, a franchisee may own multiple units of different coffee shop brands, such as Dunkin’ and Tim Hortons. This approach allows them to tap into different customer bases and maximize their revenue potential.

In the hotel industry, multi-brand franchising is common. Major hotel chains like Marriott International and Hilton Worldwide offer multiple brands under their umbrella. A single franchisee can own and operate hotels across various brand categories, such as luxury, mid-scale, and budget, catering to a diverse range of travelers.

Benefits of Multi Brand Franchising

Multi brand franchising offers several advantages to franchisees:

  • Risk Diversification: Owning multiple brands reduces reliance on the success of a single brand, spreading the risk associated with economic downturns or industry-specific challenges.
  • Operational Synergies: Franchisees can leverage their expertise and resources across multiple brands, benefiting from operational efficiencies and cost savings.
  • Market Expansion: Operating different brands allows franchisees to target various market segments and demographics, broadening their customer base.
  • Brand Synergy: In some cases, owning complementary brands can create synergies, where customers of one brand may also patronize another within the same franchisee’s portfolio.
  • Innovation: Multi-brand franchisees can stay ahead of market trends by diversifying their offerings and adapting to changing consumer preferences.
  • Exit Strategy: Diversified portfolios can be attractive to potential buyers or investors, offering a clear exit strategy for franchisees looking to sell their businesses in the future.

While multi brand franchising offers numerous benefits, it also comes with its own set of challenges Managing multiple brands can be complex and demanding, requiring strong organizational and managerial skills. Franchisees must allocate resources effectively across different brands, including capital, personnel, and marketing efforts. Maintaining consistent brand standards and quality across multiple units can be challenging. Franchisees may find themselves competing with their own brands if they operate units in close proximity. Building and maintaining customer loyalty for multiple brands can be more demanding than for a single brand.

Why Multi Brand Franchising?

As you can see, multi brand franchising is a dynamic and strategic approach to franchising that allows entrepreneurs to diversify their investments, reduce risk, and expand their presence in the market. Examples like Yum! Brands, Focus Brands, and individual multi unit franchisees demonstrate the success of this model across various industries including foodservice and hospitality. 

Another huge bonus of dual branded franchises is that multiple menus can attract a broader customer base, which can be very appealing to franchisors and franchisees alike. Say parents want a cup of coffee but the kids want a nice scoop of cream ice cream – they’ll find one-stop convenience in Inspire Brands’ dual-branded Dunkin’ and Baskin-Robbins sites.

However, it’s essential for franchisees to carefully consider the challenges and complexities associated with managing multiple brands. With dual-brand franchises, investors still must do their due diligence for assurance their market will support the particular brands you’ll be looking into. As an owner of an existing fast-food franchise, you still must comply with contractual obligations and restrictions of both current and new brands. 

Success in multi brand franchising requires a strong commitment to operational excellence, resource allocation, and maintaining consistent brand standards. When executed effectively, this approach can lead to a rewarding and resilient business portfolio.

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