One of the hottest business growth strategies in the franchise arena today is not simply growing the business you have—it’s expanding your company with the addition of new brands. Known as co-branding, this approach has become very common with food service operations but works equally as well for a variety of other concepts. In fact, many new franchisees are wisely looking to start their businesses with multiple brands instead of just a single-brand operation. Here’s why:

Having two or more brands under one roof allows you to maximize your resources and your profits. Even in today’s challenging economy, the best real estate locations are not always affordable or easy to get. By housing multiple brands, you can approach lease negotiations from a stronger position because you’re getting more space, yet your per unit overhead will be lower than if you had just one brand, which means you can more easily afford that desirable “out front” location.

You might also be able to even out customer traffic if your different brands are seasonal or if they tend to attract customers during different hours of the day. With a single management team overseeing the entire company, you can afford to pay higher salaries and attract top talent.

And you’ll get more mileage out of your marketing dollars.

The key to successful brand add-ons is compatibility in both concept and operations. Even though you’ll be operating the units separately according to your franchise agreements, putting them side-by-side has to make sense.

For example, it’s illogical to add a lawn care franchise to a hair salon but it makes perfect sense to add a tanning, massage or cosmetics brand to a hair salon. Though there will be differences, the operational structures should be similar enough so that a single manager can effectively run both without confusion or conflict.

This is what we’ve accomplished with The Tan Company and MassageLuxe. Both brands—a tanning salon and a massage therapy salon—can stand alone, side-by-side with each other and with other concepts such as fitness centers.

If you currently have a business, adding a new brand with compatible products and services allows you to increase the revenue you are currently receiving from your existing customers even as you increase your customer base through the attraction of the new brand.

For example, we have put a Tan Company franchise in a Gold’s Gym and we’ve also put some units in independent fitness centers. These units provide additional revenue streams for the gym owners. They also increase customer satisfaction and loyalty because they are conveniently meeting a need that wasn’t previously being met at that location. The Tan Company also attracts its own clientele, which then become prospective customers for the fitness centers.

Will it Work for You?

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