When was the last time you purchased a coffee before work, or you made a fast food stop? If the brand has multiple locations throughout your city or town and is recognizable like Dunkin or McDonald’s, the franchise maybe your favorite food joint.
What is a franchise business?
Everyone heard about the term “franchise” and has a sense of what does it means. Franchising is a process in which product or services are distributed by a franchisor, who establish the brand’s name or set up a business system, a franchisee who wants to work under that brand name have to pay initial fees and get the right to do business under franchisor’s name or system. If we see, technically, the franchise is a legal contract that binds two parties, one is the owner of the brand name while the other hand, the second one is the person who buys the name and starts his business. The process of selling the brand’s name and franchise system is commonly referred to as Franchising. There are two parties involved in this process. One is the franchisor, and the second one is the franchisee.
The franchisor: Franchisor is a person who owns a brand name or business, including property products, services especially logo, color, name, etc.
Franchisee: Franchisee is a person who gains the right to use another person’s brand name after paying a certain amount.
Franchise Opportunities:
Like investing in the stock market or real estate, you’re going to want to research using a combination of resources available.
You should go into your research, knowing that you’re looking for your’s best franchise opportunity.
You’re going to have your own goals, skill set, budget, business preferences, and many other criteria that make a franchise a good investment. You can’t go into finding the best franchise by having your sole criteria being “what makes money?” Many franchises make money; a lot more can lose you money if you don’t find the one that’s truly a good fit for you.
- Take personal inventory
- Go sightseeing
- Match inventory with your findings
- Pick up the phone
- Be flexible
- Pull the trigger
These steps can take you as little a month or as long as a year, depending on how ready you are and how quickly you go through it. The average timeline would be more like three months.
- Take personal inventory
Why are you buying a franchise? Is it to leave the corporate world? Have an alternative investment? Build something to pass down to your kids?
What are you good at? Do you have a great sales skillset, or are you more of an analytical person? What you do greatly affects how you can lead and run a business.
The budget is always important. How much are you trying to invest in? Are you looking at multiple locations or territories? Is the money coming from savings? 401(k)? Family? Like buying a home, it’s important to get pre-qualified, so you know what your true budget and timeline look like.
Build yourself a personal business model with all of these in mind and include if or how many employees you’ll have if there’s a physical location or home-based.
- Go sightseeing
Most people browsing online tend to go look straight for Top Franchise Lists (TFL’s for brevity’s sake). Before you go doing that you need to understand the four big problems of googling your way into a franchise:
Your business model is specific to you, TFL’s don’t take that into account. You have no idea what their criteria are. If a list is made solely off # of locations, you’ll run into the world’s subways, which are huge money pits. Find the franchise for you.
Speaking of Subway, unless you come from a food background, you should be looking anywhere but the food industry. For more on that, check out:
Owning a fast-food franchise worth the time and money invested?
You’re most likely not familiar with top or upcoming non-food industries and franchises. Keep an open mind and browse TFL’s based on your business model. Start identifying what you like about different brands and models.
Paralysis by analysis. Like trying to google your way into buying a house, you can spend all the time going down rabbit holes trying to find the ‘perfect’ franchise.
Go explore and see what makes you curious, check out the Franchise 500 from Entrepreneur.
- Match inventory with your findings
You’ve seen that there are thousands of franchises to look at in over 100 industries. How can you be sure what’s a good fit and what’s successful?
Now’s an important time to suspend your preconceived notions on what you thought Franchising was and what’s realistically going to accomplish your goals. Want an investment business that allows you to scale up, can be passed down to your kids, has a high success rate, and very profitable? It might be time to look at hair care, automotive, and fitness. Probably a bit different than thinking you’d want to own a Dunkin Donuts.
Be honest with yourself and forget what the business does and start acknowledging what it does for you.
You should never, ever, ever, only look at one franchise. Realistically you need to look for at least three franchises to dig deeper into and preferably in different industries, so you have some really good comparisons.
Your best bet here is to start looking for professional help. Like you’d take on a realtor or financial advisor for homes or stocks, you should talk to a franchise broker to find the right fit for you. Franchise brokers get paid part of the franchise fee you have to pay anyway, so it’s no out-of-pocket cost to you, and it’d be the same as if you went directly to the franchisor yourself but with a lot of guidance.
- Pick up the phone
Whether you’ve found some options on your own or sought some professional help, you need to initiate contact. Many people mistake going down the google rabbit hole again, trying to get all of their answers done ahead of time.
Get moving and go talk to the source.
- Be flexible
Like you need to be open to different industries than you might expect, you have to be open to exploring new models. Don’t try and smash square pegs into round holes. If it doesn’t fit, make a good list of what you like and don’t like about the business, update your franchise business model, and find more options that do fit what you’re looking for.
- Pull the trigger
You’ve done all your research, you’ve gotten Small Business loans preapproved, but it’s still terrifying to make a big leap like this. Refer back to why you’re looking at Franchising, confirm that this will do all of these things, and then get ready for the road ahead.
Franchises
So, now let’s have a look at some of the collection of franchise opportunities,
- Nothing Bundt Cakes
$483,437 is the Midpoint initial investment:
Five-year growth rate: 32.1%
325 is the Total franchise units:
despite being a franchise, This bakery is unique because of a “Mom and Pop shop” feel. In popular media its cakes have been featured like Food and Food Network, Wine Magazine, “Unwrapped”, and Franchise Times As, There are locations across the United States,
- Pure Barre
$234,400 is the Midpoint initial investment.
39.5% is the Five-year growth rate
Total franchise units are 472
with nearly 600,000 clients, Pure Barre is a popular boutique fitness brand Multiple revenue streams are offered by This business: activewear and bar classes. And it provides training and support for real estate, consulting, marketing, operations, and more.
- Right at Home
$113,650 is the Midpoint initial investment
14.8% is the Five-year growth rate
Total franchise units are 475
Right at Home’s mission is to help improve the quality of life for its clients As an industry leader in-home care and you don’t need prior business or home care experience, It provides new franchisees with comprehensive training.
- Soccer Shots
$47,492 is the Midpoint initial investment
11.1% is the Five-year growth rate
Total franchise units are 195
with a focus on the character development of children’s Soccer Shots is a soccer program. It has well-established relationships with national brands like Adidas and the U.S. Soccer Foundation. Low overhead cost and supports its franchisees,
- Mathnasium
$130,930 is the Midpoint initial investment
9.9% is the Five-year growth rate
Total franchise units are 797
This math learning center’s mission is to “help every child understand and master – math.it was opened in 2002. Its – “Mathnasium has earned many accolades, and over the past four years, the average per-unit gross sales grew 10% annually.
Most Profitable Franchises
- Dunkin’
- 7-Eleven
- Planet Fitness
- JAN-PRO
- Taco Bell
- Orangetheory Fitness
- Great Clips
- Mac Tools
- Cruise Planners
- Jazzercise
- McDonald’s
- RE/MAX
- Jimmy John’s Gourmet Sandwiches
- Papa John’s
- Anytime Fitness
it’s important to know if the opportunity is worth the money When you’re evaluating a business investment. The franchises listed above are seeing the largest growth in franchise locations over the past year, which is one of the key indicators for profitability.
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