One of the ambitions that I often hear from my clients who are evaluating business ownership is their vision to establish deep, multi-touch recurring relationships with the customers in their territory. We all know that starting a new client relationship takes time and money, so why not consider a strategy where you are bringing multiple products/services to the clients with whom you already have a relationship? In franchising, we call this “stacking.”
Stacking in franchise business ownership refers to a situation where an individual or entity owns multiple franchises within a specific market or region. Instead of just operating one franchise unit, a franchisee “stacks” multiple units to build a larger presence and potentially increase revenue and market share. There are some terrific families of brands in the Home Services sector, for example, who can help a franchisee own and establish multiple services to bring to those customers in their territory.
This strategy can offer several advantages:
1. Economies of Scale: Operating multiple franchises can lead to cost savings through bulk purchasing, shared marketing expenses, and streamlined operations.
2. Market Dominance: By owning several franchises in a particular area, a franchisee can establish dominance over competitors and become the go-to option for customers seeking that brand’s products or services.
3. Cross Marketing: Opportunities to cross-market your different services to the customers that call you for any individual service that you provide. Some franchisors also play a role in cross-marketing to customers known in your area from their other brands too.
4. Diversification: Owning franchises from different brands or within different industries can help spread risk. If one brand or market segment experiences a downturn, the franchisee may still have revenue coming in from other sources.