A smiling woman holding a sign that says "OPEN"

There are a number of important clues you should look for when you are trying to decide when to open the next franchise location. Expanding your franchise operations takes more than a desire to make more money. You have to make sure there’s a large enough customer base and strong enough demand for your product to make the new location a success. 

We have been providing franchisees with the staff they need to successfully expand their franchise operations for many years. We have the expertise and experience to help any franchisee get the staff they need to grow their business at just the right time.

Expanding Your Franchise Operations

Important Considerations

Expanding franchise operations is a major step. It’s one that should not be taken without taking several things into consideration. They include:

  • Are there too many customers for your staff to handle at your current location?
  • Can simply increasing the size of your shop or restaurant handle the overflow?
  • Is your customer base large enough to make a second franchise location profitable?
  • Have you identified the right location for your second business? 
  • Can you find the right people to staff it?

When to Open Your Next Franchise Location

Some of the key factors that can help you decide when to open the next franchise location and ensure it will have a high probability of being successful include:

1. You Have Several Regular Customers

If you have a large number of regular, loyal customers, and your customer base continues to grow, that means there’s a consistently increasing demand for the product or service you provide. No matter what type of franchise you have, repeat customers are the key to success. Don’t base your decision on expanding franchise operations on one sudden spike in customers at your current location. When you see a stable, recurring revenue stream year-round, you should seriously consider opening a second location.

2. Customers Often Ask You About Opening Another Location

If many customers that regularly spend money at your current location keep asking you when you are going to open a second location, it might be time to grow. Being able to better satisfy your customers should be the motivating factor behind expansion plans. Plus, if customers routinely travel a long distance to purchase your products and services, expanding into a second location makes good business sense if you grow based on customer requests and their consistent purchasing patterns. 

3. Your ROI Is Steadily Increasing

If the profit you make from your current franchise location is consistently increasing, it could be a sign the market can support your expansion into a bigger or second location. This decision should not be based on short-term success. However, if the size of your customer base, revenue, and profits show consistent, long-term growth, expanding into a second location could be a lucrative business decision. The key is to make sure that you see a pattern of consistent growth. If customers are satisfied with your products or services, a second location can enable you to profitably serve more customers in a wider area. 

4. Your Franchise Is in a Growing Industry

Before deciding to expand into a second location, study the trends in your industry. If your research shows your industry is growing, now might be the right time to open a second location. Opening a second franchise location is a great way to take advantage of the opportunity for increased income, growth, and stability. By opening up another location, you not only reap lucrative short-term benefits, but you can also future-proof your franchise by providing customers with new products or services.

5. Your Current Location Has Too Much Business

If your franchise is attracting much more business than you can handle in your current location, it might be time to grow. Don’t wait until overcrowding or customers having to endure very long wait times for service begins to hurt your business. If just expanding franchise operations to a second location will allow you to better manage consumer demand for your product or service and even bring in more customers, take action. We can help you hire the additional employees you will need to serve customers at your new location.

6. You Have Done Your Due Diligence

Opening and running a second franchise location requires funding, franchisor approval, potential structural changes, as well as assessing growth potential and possible liabilities. If you’ve done your due diligence, and your calculations look overwhelmingly positive for the outcome of an expansion, and the only real question is when to open the next franchise location, it’s time to open a second location and grow your business. Double-check the details, get professional financial advice, and take the plunge.

7. You Have the Skills, Resources, and Opportunity for Growth

Creating and growing a business requires a unique set of skills, abilities, resources, and opportunities. It also requires vision and courage. In business, there’s no such thing as “a sure thing.” However, if you have the skills, resources, and opportunity for growth, don’t let fear hold you back. Do an evaluation of your business skills, customer base, and potential market size and share. If they all are in your favor, the time is right for you to expand into another business location where new customers are waiting to spend money with you.

8. You Have the Right Team

Running a franchise profitably and successfully requires a team effort. You must have the team with which to share the burden involved in the day-to-day details of managing two business locations. If you have a team with the expertise, focus, vision, customer service, and time management skills needed for a second location to prosper, you are ready to grow. If your team is equipped to take on the challenge, delegate some responsibility as necessary and go for it.

9. You Have a Trusted Network of Outside Experts

Outside experts can give you the help needed for your growing business to prosper. If you have a network of outside experts to give you the help you need, you are ready to expand into a second location with your business. Being willing to listen to and follow the advice of the business experts you hire is essential for success when you expand your business to a second location.

10. You Have Help Hiring the Right New Staff

A woman showing a laptop screen of the Sprockets hiring platformYou know it’s time to open a second location when you need to hire several new employees to serve the large and growing customer base. We can help you to hire the right new employees you need to help your current staff with the increasingly demanding workload.

Sprockets empowers you to hire applicants that are such a good fit that it might seem like magic. However, it’s a result of combining technology, logic, and psychology to identify which job applicants are most likely to be as effective in performing the job as your best employees.

We interview your franchise’s top employees and use artificial intelligence to recommend employees that have similar characteristics. Our sophisticated solution makes expanding your franchise operations easier and much more likely to be successful.

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