Scaling a franchise isn’t just about opening more locations—it’s about growing the right way. From financial planning to leadership development and operational efficiency, there are key strategies that successful franchise owners use to expand without losing quality. In today’s episode, we’re diving into expert insights on scaling your franchise the smart way, avoiding common pitfalls, and building a sustainable growth strategy.
If you like this podcast, then check out my newsletter called Xpansion Press. Business content delivered to your inbox. Just click here to sign up.
Scaling a franchise sounds exciting, but it’s filled with challenges that can trip up even the most ambitious owners. Here’s where many franchise owners struggle:
Imagine this: You own multiple franchise locations, each running like a well-oiled machine. You have the right people in place, revenue is climbing, and you’re no longer tied to the daily grind. Here’s what happens when you scale the right way:
Scaling successfully isn’t about luck—it’s about following proven principles. Here are the essentials:
Scaling isn’t about opening locations as fast as possible—it’s about smart, sustainable growth. Here’s how you can do it:
"
Scaling your franchise doesn’t have to be overwhelming. Here’s your action plan:
So I have a question. How are small business owners like us who are spending sixty plus hours a week working in our businesses and are still struggling to make ends meet? We have no time to spend with family, friends, or the things we value most in life. We feel trapped inside of our businesses, and it is consuming our lives. How do we get the freedom to be able to work on our businesses and not in them?
That is the question this podcast will give you the answer. My name is John Nichols, and this is expansion code radio. What's up, everyone? Welcome to today's podcast. If you've ever dreamed of turning your single franchise location into a thriving multi unit empire, you're in the right place.
Scaling a franchise isn't just about saying, hey. Let's open up another store. It's about planning, strategy, and knowing when to make the right moves. Today, we're gonna break down expert tips on how to scale your franchise successfully without burnout or going broke. Let's dive in.
Scaling a franchise sounds exciting, but it's filled with challenges that can trip up even the most ambitious and seasoned owners. Here's where many franchise owners struggle. One, financial strain and cash flow issues. Expansion requires capital, and poor financial planning can lead to debt or failure. Number two, operational inconsistency.
Maintaining quality and service across multiple locations is tough without the right system. Number three. Leadership gaps. You can't be at two places at once. Scaling requires a strong team that can operate independently.
Number four, market saturation and location selection. Expanding too fast or in the wrong area can cannibalize your sales of your existing locations and stores. So let's kinda go back and get into a few of these topics that we have. I really wanna dive into number one, financial strain and cash flow issues. Now we grew pretty quickly in our UPS stores.
We went from one location in 02/2011 to February. We went from one to 11 locations in that time frame. That's a lot of growth very quickly. And we had to learn a whole lot real quick. And when we went from two locations to five locations, so I had a opportunity to buy three locations that were in the process of being shut down by corporate.
The problem was is that it came down to we were $50,000 short on cash. So during that time frame, we had to go get an SBA loan for $50,000. Now I don't know if you folks have ever worked with the SBA as an organization, but they are a pain in the butt. We had to jump through so many hoops. You would have thought that we were asking for 2 or $3,000,000.
It was just a meager $50,000. But they made us go through so many hoops and do so many different things and came coming back to us for more information and more information and more information and more information. So the one thing we figured out during this whole process was that you need to find a small local bank that you have a good relationship with or that you can build a good relationship with. And the reason why is that the SBA works better with small banks versus large national franchise banks or national banks. The big thing is is that the SBA prefers small local banks over the big boys.
And so that there is one of my tips today as far as, you know, financial strain and cash flow issues is just make sure that you find a a local bank to do business with. And if you already have that, then you've already got a leg up on most everybody else. It's one of these things that really makes a difference in how you're gonna be able to push your expansion forward and make this deal happen. But here's the thing. When done right, scaling your franchise can be the key to financial freedom and long term success.
Let's talk about the possibilities when you scale strategically. Imagine this. You own multiple franchise locations, each running like a well oiled machine. You have the right people in place, revenue is climbing, and you no longer are tied to the daily grind. Here's what happens when you scale the right way.
Number one, increased revenue and profitability. More locations mean more income streams and greater financial security. Number two, stronger brand presence and market share. Expanding smartly helps you dominate your region and build brand authority. Number three, A team that runs the business for you.
With a great system and leadership in place, you can step back and focus on the big picture. Number four. Opportunities for further expansion. Once you master multi unit operations, you can open doors for even bigger growth. Regional, national, or even international.
So let's get into you a couple of these real quick. So the one thing I really loved about expanding into multiple locations was increased revenue and profitability. You know, once we went to five locations, it really freed up my time because I had to depend upon team. And not only did I have to depend upon team, it also I made more money doing this. And I all came back to building a team to run the business for you.
That's where the time got where my time got freed up at. And I also started making more money this way. But just remember this, you're either gonna give up your time or you're gonna give up your money in in whatever you do. And so the thing is, I know I can make more money. So I'd rather give up some of my profit, hire more staff, have a better team, then take home more money and be working seventy hours a week.
That doesn't sound fun to me. I don't know about you, but working ten hours a day, seven days a week is not fun. I've done it. Whenever I had, two locations, I worked my tail off. And I can tell you this too.
The big thing about it is is that you gotta figure out how much money your franchise is making and how many locations you're gonna need in order to hit your financial freedom goal. That's a big thing. That's the one thing that that's a tip that I'm gonna tell you that you need to figure out. So the benefits of owning multiple locations sounds amazing. Right?
Now let's break it down into core principles that sets franchises apart. Scaling successfully isn't about luck. It's about proven principles, and here are the essentials. Number one, financial preparedness is everything. You need a solid financial plan, access to capital, and a realistic budget for expansion.
Number two. Systems and processes make scaling possible. Standard operating procedures, SOPs or SOPs, ensure every location runs smoothly and consistently. Three, people drive growth. Strong leadership and training programs create a team that can handle multiple locations effectively.
Four, market research matters. Never expand blindly. Analyze demand, competition, and location viability before committing to expanding anything. I just wanna go back and talk about some of these principles real quick. The big thing that we had to do is that we had to redo our business plan and our systems and processes two or three times as we expanded.
It really makes a big difference in understanding what you've gotta do. You've gotta make things repeatable and consistent. And so in doing that, we had to make all the stores look the same as far as how they operated. We had what we called a playbook. And in the playbook, there was one for the managers and there was one for the teammates.
Everything we did in that playbook showed them how to do things. It showed them how to open the store up, showed them how to close the store down. It showed them cleaning procedures. It showed them all kinds of just daily things that have to happen. It had a schedule wrote down to when you need to take out the trash, when you needed to do this.
It had a cleaning schedule, who needed to clean, who was signed up for cleaning, what time of day you cleaned, whether you cleaned at night or in the morning. It had everything that you needed. This standard operating procedure has to be the foundation of multiunit ownership. If you don't have it, then you're gonna be living in chaos. And so I'm really telling you right now, you gotta spend the time and develop it.
Now this is a pain in the butt. I'm gonna tell you right now, and it takes up a lot of your time. Once you got a standard operating procedures done, now you have the foundation to build upon that. And whenever things come up, whenever you need to fix some things, it's just adding a section into this that you've already built. And so it's like you you're building on top of this foundation that you've already created.
Let's say a new product line comes in, then you just add that section in there on how to do this, and it really makes life a whole lot easier. But when you have one location, I would suggest before you expand, come up with your own standard operating procedures on how you do things that can be repeatable and consistent across the board. When you do this, it will make going to the next step of owning a second, third, fourth, fifth, or sixth location a whole lot easier. And And I don't know if you I don't know if I've told you guys this or not, but we actually own 10 locations of the UPS Store franchise. So in saying all that, really make sure that your systems and procedures are done correctly and you make them scalable and repeatable so that all locations operate the same way.
Now in saying that, each location will have their own personality because of the customer base and your employee base. So the people working in that locations will bring personality to the store, and your customer base will bring in another piece of this personality into this location. And so you have to read that too. And so we always created a little separate piece for the manager to build into the personality of the location. This is another part of centered operating procedures, but it was specific to this particular location.
Let me give you an example. Let's say that your franchise is in a location that is mostly residential and middle class. Well, you are going to have to adjust to the way that these people operate. And so whenever you take the time to understand who your customer is, what they're coming in and doing, and how they're doing things, then that creates the personality for that location, and you can tweak just that piece of it. Let's say that you own a UPS store in Downtown Atlanta, and you have mostly business customers coming in.
Well, it is gonna be a much different personality than in mostly middle class residential area. So you really have to understand that the personality of your of these new locations really does matter, and you really have to address how you do things And also the products and services that you push and market are gonna be a little bit different. So if you're in a more strategic business location like Downtown Atlanta, well, for us, we would be pushing notary more. The reason why is because you're gonna get a lot more a lot more need for you're gonna get more need for notary in a business sector than in a residential sector. So just kinda remember these things as you are building out your next franchise.
Now that we understand the principles, let's get into the step by step strategies that you can use to grow your franchise the right way. Scaling isn't about opening locations as fast as possible. It's about smart, sustainable growth, and here's how you can do it. Number one, start with one strong, profitable location. Before you expand, make sure that your current franchise is financially solid and running efficiently.
Number two, build a rock star leadership team. Train managers who can operate new locations without you being there daily. Number three. Use data driven site selection. Research foot traffic, demographics, competition to find the best location for your growth.
Number four, financial and expansion capital. Whether you're using franchisor support, investors, business loans, make sure you have the funds to scale without financial strain. I know that in doing this podcast, we've talked about finances, finances, finances. Your finances are gonna be the backbone to being able to expand into multiple locations, and you're gonna be able to have to find the bandwidth to do this. We always got business loans for everything that we did, but I do know people that have taken on business partners.
I know that people that have gone to investment bankers and got money this way. And sometimes, in certain franchises, the franchise itself will let you finance the new location or an existing location that you're buying through them. The UPS store franchise used to let you finance up to, I think it is, a hundred and $50,000 for either a new location or buying an existing location. Now, in saying that, they have recently stopped that process and they've partnered up with a new banking system or banking partner, should I say. They recommend you go through them for the financing, but they did used to have their own financing financing department.
In saying that, check with your franchise and see if there is any finance options through the franchise themself. Some franchise do it, some franchise don't. But if not, they may be able to recommend other financial institutions to help you out with that. And I wanna talk a little bit about number one, start with a strong and profitable location. And I wanna say this, you have to have your first location, it has to be profitable.
It has to be doing very well, and you have to have growth in it. Because if you don't have growth in that one, because that that location is gonna fund your next location, And then those two locations will fund your third location. In my case, I had one UPS store. It helped fund my second store. And then those two locations together help fund the three I bought together.
And so the thing is is that whenever you're doing these things, you really need to understand that your first location needs to be your measuring stick for all your other locations. That location has to be done right. You have to get everything correct on it. You gotta make sure it's growing and profitable before you open up any other locations. This is vitally important in your growth for doing this.
Strategies are great, but execution is what makes the difference. Let's wrap this up with clear action plan. Scaling your franchise doesn't have to be overwhelming. Here's your action plan. Number one, evaluate your current business health.
If your first location isn't thriving, fix the issue before you expand. Number two, develop an expansion blueprint. Plan out financials, staffing, operational structure before opening a new location. Number three, strengthen training and SOPs. Document everything so new locations can replicate your success.
Four, execute and monitor closely. Once you open a new location, track key performance indicators, KPIs, and make adjustments as needed. And as I was saying a few minutes ago, evaluate your current business health in your first franchise or even in even if you have two or more locations, be sure and see how they're doing. You know, we developed a plan to making sure that, we focused on every person that came to the door. We wanted to make sure that the person that came to the door, our customer, was spending as much money as they possibly can in our location.
And most of that has to do with educate your customer about your services and your products. It's key. And that's the one thing on how you're gonna be able to monitor your business health. You have to create things like that in order to make sure that we are doing stuff. So we focused on in store advertising instead of out of store advertising.
Now when you open up a new location, you're gonna have to focus for at least the first year on on out of the store advertising. In the same token, you're gonna have to focus on in store too. Every customer that gets driven into your location, you need to make the most out of that. And that is where you can really make leaps and bound in making sure that your location, if it's your first, second, or third, or whatever, is thriving, is that you gotta make sure that when people come in, they are spending the most amount of money possible. Here's my example.
Most people don't realize that we do printing at the UPS store. And one of our key things that we do is that we try to educate our customers that we do printing. Instead of them coming to us and then they're shipping a package to grandma or they're returning the Amazon package, but they still need to go down the street to the local printer, well, they can do that printing with us. It's very key that we educate our people and our customers on all the services that we do. We want the customers to spend as much money as possible and don't have to go someplace else to get the same products and services that we provide.
This is key, and this is how you really build up and make your, franchise really healthy. It's vitally important that you really take the time to do these things. The next thing I wanna touch back upon is those, SOPs. Make sure that your standing operating procedures are across the board, that you are developing them. It's really important that when you train new employees that they have a reference guide or a playbook to look at so that this way they can learn, that they can go back and make sure that you have step by step guides on doing things.
My example for that is closing the UPS store. We have a step by step guide on what exactly to do whenever you're closing down the store. It talks about cleaning procedures. It talks about taking out the trash. It talks about vacuuming.
It talks about how to count down a register or POS system. It talks about how to do the end of day stuff. It talks about where to put the money at the end of the evening. It talks about all those things so that this way, it is a step by step guide to where a new employee can do this. And it's also a great reference guide for employees that have been around for a while.
And the last thing I really wanna touch on is the KPIs. The key, they they track your key performance indicators. These are big, big things. And the way that we do it at our locations is is that we have a daily report that comes out to all the locations. It's in an email.
It's a it's a Excel spreadsheet, and it talks about where we are for that month, how much money we've made in all different kinds of profit centers, and it compares it to the same day the previous year. So it's month, day, profit centers, and then it compares it to the same day the previous month in the previous year. Everybody's able to see this. Everybody's able to see every store, how they're doing, what they're doing. And if you and we send this out at least three to four times a week, and it really makes a difference.
And I would really say that you really need to be open with your employees about where you're at financially. Let them be let them see what's going on. Tie how you're doing financially and growing to bonuses that they can get. All these things really matter, but it's vitally important that you monitor and track these key performance indicators so that this way you know where to make adjustments. If you see that you're starting to dip in the month or whatever else, for us, we look at the, ACT, the average customer transaction.
And if our ACT is down from the previous year, well, that means that people aren't doing the processes and procedures the correct way to really promote growth in the location. So then we have to go in, talk to the manager, tweak some things, and get our people back on track. So like I said, the KPIs are so vitally important in whatever you're doing. And especially when you have multiple locations, it is the only way to make sure that your locations are growing. Scaling a franchise is one of the most exciting and challenging things you'll ever do as a business owner.
With the right strategy, strong leadership, and careful planning, you can build a multi location powerhouse. Thanks for tuning in. If you found this episode valuable, subscribe and share it with another franchise owner who is ready to scale. If you like this podcast, then check out my newsletter called Expansion Press. You can get great business content delivered directly into your inbox.
Just go to xpansionpress.com or click the link in the episode notes. Have a great day, and I will see you on the next one. Thanks a bunch for hanging out with me today. This episode was jam packed with golden nuggets to fuel your business journey. If you found this episode helpful, why not share the love?
Pass it along to a friend who's on the same journey as you. And speaking of sharing, have you checked out my free newsletter yet? It's chock full of valuable tips and tools to boost your business and save you time. Trust me, it's worth checking out. Go to www.expansionpress.com.
The link is in the podcast folder. Catch you later and have an amazing day.