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10 Rules: How to build a multi-brand franchise empire

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Franchise operations are like building blocks. The number and combination of franchise brands you operate will support your business goals and growth objectives.

If you’re up for the challenge, multiple franchise brands and multiple locations is the way to go when it comes to building a franchise empire.

It’s not easy. That said, if you can do it, and do it well, the benefits far outweigh the risks.

Building my portfolio of franchise operations has been quite the adventure! I’ve learned a few things along the way.

These are my top ten rules for how to build and run a multi-brand franchise empire.

1) Think big to win big

multi brand franchise
Left to right, Justin Zheng, Simon Cheung, Joseph Wong, Will Wei, Ti He.

In the franchise business, more is better. Not only is it more fun and challenging, more locations means greater economies of scale. This can realized through:

  • Reduced internal warehousing and distribution costs
  • Shared labor amongst your locations
  • Lower cost of goods
  • Advertising efficiencies
  • Critical mass benefits (i.e. location and lease considerations from landlords)
  • Improved operations due to the ability to develop a strong internal management and training infrastructure

In addition to having multiple locations, I recommend operating multiple franchise brands. Multiple brands means multiple pricing strategies where you can work with a lower price franchise chain or a higher price franchise chain.

Multi-brand growth can be an excellent way to grow your franchise business. Operating multiple brands spreads the risk across several retail concepts, giving you added security. It also encourages cross pollination of best practices from each brand between your operations.

2) Think long term

My first boss, Simon Cheung, came to Canada with nothing. Through hard work, he became a successful businessman whose holdings include over twenty restaurants across Canada. Today, Simon is my business partner. Simon taught me the importance of leading by example and treating everyone with respect.

Never underestimate the importance of having loyal, reliable employees and partners. Don’t just put effort into training and developing your employees, put effort into retaining them.

The same rule applies to your suppliers and contractors. Treat them well and build respectful long term relationships.

Always think long term in regards to your financial projects. Look at factors like the ten year cash flow projections or five year renovation or lease increase. Good franchises will let the franchisee run like a complete business owner and won’t micro-manage or exert too much control. If you are feeling being micro-managed or controlled too much, maybe it’s time to jump your ship to mine.

multi brand franchise
During the Construction Phase You Have to Be Patient. Fraser Landeen, Will, Ti He

3) Don’t forget- you’re in the Penny Business

The franchise business is a penny profit business. The goal in this model is to make more total money by making less per transaction but making a lot more transactions. In the Chinese business community, there is a saying called 薄利多销, which means “A penny can bring you profits if you sell a large quantity.”

In this context, it’s especially important to control your costs. Having economies of scale will allow you to drive costs down and obtain favorable contracts with suppliers and service providers. 

4) Treat your contractors like gold- especially the good ones

Good contractors who finish projects on time are worth their weight in gold. We select contractors who have a proven reputation for producing quality work and who will push hard to meet deadlines.

When we were building a new location, our contractors worked until 12AM to finish the paint job to ensure we met our goal of being open by Christmastime. If you find a contractor like that, treat them well and maintain the relationship!

5) Location, location, location.

The location of your business can be as important to your success as having a good product to offer to your customers. Location can make or break a franchise business. Make sure you get solid advice from a local realtor.

multibrand franchise
On the day of the grand opening of our Carl’s Jr. in Calgary

When choosing a location, consider factors like the age and demographic profile of your target market. What is the history of the location- have other similar businesses in the immediate area done well? Does the location get enough walk by or drive by traffic? Drive-through purchases make up 40% of my sales in some stores, so city zoning is very important. Look at the proximity of your competition and determine their strengths and weaknesses. 

6) Your business banker is your best friend

Beyond helping you get the financing you need, a great banker can help you with so much more.

Look for a banker who proactively helps you deal with your challenges and prevent future problems. The best bankers will be very familiar with the local economy and business environment and will be able to give you advice to help you make the best decisions for your company.

Many business bankers will be glad to have your business but if you show your loyalty to a couple of people, they will appreciate it. Spend time building a good relationship. Once you have that relationship, your banker will be focused on helping your business succeed- not just selling you on products and services.

7) Get involved with your community

Engage with your local community. Community involvement contributes to key business goals, including improved reputation and the attraction and retention of employees. Everybody was happy when Carl’s Jr. donated collectively to Fort McMurray fires.

Donating to charity or sponsoring a local sports teams or event distinguishes your business from the competition. It also allows you to build genuine relationships with your customers and community. Plus, it’s just good karma!

8) Pay attention to politics

Pay attention to political trends and changes in legislation. In my opinion, changes to minimum wage are not a huge concern because it’s only 1 or 2 percent of your overall sales compared to the quality of workers you may get in return.

Changes to immigration policy and student grants are very impactful to franchise business because some of our best employees are students and immigrants.

9) Think internationally

The franchises who gave you options to pick and vendors to choose from are the best ones. Some of the best franchises we have worked with so far have been Arby’s, Carl’s Jr, and Wendy’s. that value your input to put the best product and service out there. Look for a franchise with huge global expansion plans in the books so you can at least travel and learn from their operations.

In terms of outsourcing from overseas, it’s the price you are willing to pay that determines the quality. The companies we work with pick the best quality products from overseas with our collective approval.

multi brand franchise
At one of our Carl’s Jr. locations in Calgary

10) Learn from your partners and staff – and give credit where credit is due

Learn as much as you can from the people around you. Learn from people who have been in the business longer than you have. Learn from your employees. They have an on-the-ground perspective of your business you just don’t have and have knowledge you just won’t have. Learn from your contractors. They have valuable insights into changing conditions in your business environment.

multi brand franchise
Will Wei and Fraser Landeen.
Finally, give credit where credit is due. It takes a team to make a business a success.  Finding great business partners, managers, bankers and accountants is not easy. I feel lucky to have a great mentor, Simon Cheung, and great business partners, Quincy Yang, Ken Yang, Ti He, Fraser Landeen, Justin Zheng and Alan Su. After staying in a motel on skid row in California while we went through training, I feel like we can handle anything! The VP of Carl’s Jr. Canada, Jeff Branton, and Operational Manager, Marybeth Chambers, also play an instrumental role in ensuring our business operates smoothly. My business banker, Adam Avramenko at RBC, lawyer George Huang and accountants Ivy Chen and Svet Pargov all do their part no matter how late in the night I call or text them. 

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Will Wei View All

Will’s personal motto is Where there is a Will, there is a Wei. He spent the majority of his early career in investment management. He is the CEO and major shareholder of Imperial Seal, an international group with language schools and restaurant operations in China as well as multiple franchise restaurants in Canada.

4 thoughts on “10 Rules: How to build a multi-brand franchise empire Leave a comment

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