Are you feeling dissatisfied with your current job and ready to pursue a significant career change? Opening a franchise business can be an excellent way to establish financial security and gain greater control over your livelihood. Starting a franchise requires a strong commitment and considerable capital, but the rewards of business ownership and independence make it worth the effort.
The International Franchise Professionals Group (IFPG) is the leading source of assistance in the franchising industry. Our membership-based network includes more than 1,300 franchisors, consultants, and vendors. Together, our members provide aspiring business owners with comprehensive guidance throughout the franchise selection and investment process. With decades of collective experience, we create innovative strategies, develop training programs, and set the bar in the franchising field.
Whether you’re a franchise consulting professional or a career changer looking to start a business, the IFPG has you covered. To make the franchise selection process easier, we’ve compiled this guide to answer your most frequently asked questions about the best franchises to open.
1. What are the most profitable franchises?
When evaluating franchise opportunities, it’s important to consider profitability potential. Most franchisors provide detailed financial information about their business model, so investors can determine which industries and types of businesses are most likely to succeed.
Hotel, restaurant, and auto services franchises tend to be profitable due to their long-term customer base. Other lucrative segments include business coaching, roadside assistance, staffing, health & fitness, home staging, and pet services.
Real estate investing, home repair, and janitorial services are also profitable franchise options. Healthcare franchises, such as medical transport, geriatric services, and wellness clinics, are also a safe bet for investors looking to provide essential services.
2. What are the different types of franchises?
Franchises come in a variety of types, all of which have their own advantages and disadvantages. The most common types of franchises are product distribution, area development, single-unit, and master franchise.
Product distribution or “business format” franchises involve the sale of proprietary products or services. The franchisor owns all or part of the intellectual property, and the franchisee pays an initial franchise fee in addition to royalties.
Area development franchises require the franchisee to develop a certain area or territory. Franchisees in this type of agreement purchase more than one unit in a specified region and must follow specific geographic requirements.
Single-unit franchises involve the sale of one individual business. With this type of agreement, investors are required to pay both an initial franchise fee and ongoing royalties.
Master franchise agreements are a way for franchisees to develop their business in a larger region or multiple countries. This type of arrangement requires considerable capital and a high level of risk, but can pay off if done properly.
3. What are the most popular franchises?
The most popular franchises tend to be fast-food chains and retail stores. These businesses have well-known brands and reliable customer loyalty, which are important factors in determining success.
Fast-food establishments, such as McDonald’s, Burger King, and Subway, are the most popular franchises in the US. Other popular franchise categories include convenience stores, restaurants, home care services, and auto services.
However, the most profitable franchises are not necessarily the most popular. Investing in an established service or product franchise can be profitable in the long run, even if the business isn’t as well-known as its competitors.
4. What are the cheapest franchises?
It’s possible to own a franchise with limited capital. You may even be able to start a business with no money down. Franchises such as Senior Helpers, Cruises Inc., and The UPS Store require minimal upfront investments.
There are also a few franchises under $100k. Tutoring franchises like Mathnasium, franchises that sell dry-cleaning products such as Free Ironing, and car-care services such as ShineBrands are all examples of low-cost franchises.
5. What is the best franchise to own?
Choosing the best franchise to invest in depends on your individual goals, interests, and financial abilities. Investment advisors typically recommend investing in an industry you’re familiar with and a business you’re passionate about.
However, there are a few franchises that stand out from the rest based on their low costs and high profitability. Tax preparation franchises such as Liberty Tax Service, staffing and employment franchises like Express Employment, and window-cleaning franchises like Splash and Shine are thriving businesses that can yield strong returns on investments.