Whether you’re a novice entrepreneur or an experienced business professional, the idea of owning a franchise may be appealing. But with hundreds of franchise options to choose from, how can you find the best option for you? To help business owners make the most informed decisions, the International Franchise Professionals Group (IFPG) has compiled this guide to frequently asked questions (FAQs) about the best franchises to own.
Why Own a Franchise?
A franchise offers numerous benefits to entrepreneurs, including cutting-edge training, ongoing brand management, and support from an experienced franchisor. Compared to the time (and money) it takes to completely develop and run a business from scratch, franchising can offer a much quicker investment return.
What Makes a Franchise Different From a Regular Business?
Franchises require an upfront investment in exchange for an established product or brand. Franchises also provide more security than a traditional business, thanks to the resources and assistance provided by the franchisor. Business owners are also held legally responsible for following the franchisor’s operational regulations, which are usually established to protect and maintain national brand standards.
What Types of Franchises Are the Best to Own?
The best franchises to own depend entirely on your individual goals, interests, and expertise. To ensure a successful business, consider your unique abilities, skills, and industry knowledge before investing. Here are a few franchises worth exploring, based on investment size, popularity, and return on investment:
Fast Food Franchises
Fast-food franchises have the potential to generate high sales volumes due to the affordability and convenience of their product offerings. While successful franchising can be challenging, famous national brands like McDonald’s, Burger King, and Subway have numerous franchising opportunities nationwide.
Retail franchises like Door Hardware, Home Decor Superstores, and Clothing Stores offer entrepreneurs the chance to create a brand in the highly competitive retail industry. While these types of franchise offer a higher investment upfront, the potential for success can be greatly increased by establishing a universal brand and understanding the industry trends.
The demand for cleaning services has grown in recent years, making cleaning franchises a lucrative option for individuals looking for a low investment business opportunity. Cleaning franchises are usually home-based, offer flexible hours, and there are several different business models available in this sector.
With the right combination of a good location, a strong customer base, and unique products, restaurant franchises have the potential to be extremely profitable. Depending on the franchise, most restaurants require significant resources upfront, including kitchen equipment, seating, and staff. It’s important to choose a franchise concept that aligns with your goals and resources.
What is the Best Way to Research Franchises?
After deciding on a few franchises that meet your criteria, it’s important to dedicate time to research the options thoroughly. Ask the franchisor to provide you with a Franchise Disclosure Document (FDD), which outlines the details of the franchise. The FDD should include all the necessary information such as start-up costs, franchisee responsibilities, financial information, termination and renewal policies, and royalty fees.
Once you’ve narrowed down your list of potential franchises, take a look at existing franchises within the same sector. Speak to franchise owners who have experience with the brand to get a better understanding of its operations and determine if it will be a good fit for you. Finally, use resources like the U.S. Small Business Administration (SBA) and the International Franchise Association (IFA) to learn more about the franchising process and find out how to get set-up for success.