How do you determine whether or not you want to do a single or multiple franchise? We currently own a single franchise and were considering expanding locations but want to know what we should consider before doing so and thought this would be a good forum to help us.

The most important thing you can do is look at it like an acquisition. If you were going to "aquire" the new franchise what synergies would you get. Could you use one manager versus two? How much would you save on ads? Are there supply discounts that you would get? You have to go through each line item and see where you will be able to save. Also on the revenue side you have to see if there are clients that are coming to one store that may come to the other store that is closer and do more business with you because of the convenience.

In a previous life I worked for one of the package/mailing franchises and the owner was told that they would significantly increase their profits if they owned another store and as it turned out he did not make as much as he intended. Primarily because it was a people intensive business. The one area he did save in was advertising costs.

If it is a Franchise that will not require a considerable amount of your time on location you should consider opening up another franchise. If you are making $50,000 on one, providing you have a similar type location there is no reason why you should not be able to duplicate it. Taking it a step further you could consider becoming a master franchisor.