Is Multi-Concept Franchising the Future?

In the fast-paced world of multi-concept restaurant franchising, operators are finding new ways to expand their portfolios and reach a broader audience. With companies like Jack in the Box and Next Brands leading the way, the trend of combining multiple brands under one corporate umbrella is gaining momentum.

One key benefit of multi-concept franchising is the ability to sell more units with fewer franchisees. For example, Jack in the Box saw success after acquiring Del Taco, with existing franchisees eager to take on a second brand to expand their reach. This strategy allows operators to maximize development opportunities in markets where they may have hit a saturation point with one brand.

However, not every operator is suited for multi-brand investments. It’s essential for franchisees to have a diverse portfolio and the infrastructure in place to manage multiple concepts effectively. The trade area also needs to align with the target demographics and markets of each brand to ensure success.

Companies like Next Brands are carefully navigating the challenges of managing multiple brands. With legacy chain Beef-A-Roo and emerging smoothie chain Blenderz under its belt, Next Brands is focusing on building brand recognition and expanding into different markets that cater to distinct demographics.

Similarly, Jack in the Box recognizes that not every dual-brand opportunity is suitable for its business model. With Mexican chains not being as consistently visited as burger chains, the company prioritizes maximizing each brand’s potential in specific markets independently.

On the other hand, co-development strategies are gaining popularity, with operators seeking larger properties to accommodate multiple brands. By leveraging co-branding opportunities, companies like GoTo Foods are finding success in combining brands like Jamba and Auntie Anne’s to accelerate franchise growth.

These innovative strategies not only help operators capitalize on larger properties but also drive efficiency and cost savings. By sharing a building with demising walls, companies like GoTo Foods are finding creative ways to reduce development costs while expanding their presence in the market.

As the market for mergers and acquisitions continues to grow in 2024, we can expect to see more companies embracing multi-concept franchising and experimenting with new strategies to stay competitive and innovative. With a focus on creative and flexible development approaches, the industry is poised for continued growth and evolution in the years to come.

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