What are the most profitable franchises to own? When you are looking for a franchise business, you want to find one that will give you a great return on your investment. There are a number of ways to go about finding a franchise that will work for you. The best way, though, is to consider the franchises that have done well in previous years and compare that to how those same franchise opportunities are doing currently.
Specific franchises that continually end up as top performers in lists by Entrepreneur and other franchise publications include McDonalds, Firehouse Subs, Jersey Mike Subs, Taco Bell, Wingstop, Planet Fitness, Massage Envy, Primrose Schools, Re/Max LLC, Merry Maids, and Super Cuts. Any "best of" or "most profitable" list within the past couple of years will include these franchises, or at least a good portion of them. A quick glance of those lists also reveals that fast food, automotive repair, franchises related to children (entertainment and educational), and health, beauty, and fitness franchises are the industries represented most frequently.
When you are looking for a franchise to buy or the most profitable franchise, considering the industry first is the easiest way to go about it. What industries are doing the best. The industries mentioned above have consistently performed well for franchises. There are probably a number of reasons this is the case, but it really boils down to fast food (Americans love to eat on the run), fitness (we like to fix the problems caused by so much fast food), automotive (because our vehicles will always need to run), and children-related franchises (because there is a growing need for childcare and education).
When you are looking for a franchise opportunity, it may be tempting to jump on the bandwagon and get into one of the hottest new trends. These trendy franchises may look good on the surface, they may even perform well in the moment, but how long will they be around. The popular industries talked about above are proven and should be considered solid opportunities year after year, meaning you can count on them for profitability with a lower risk than many other franchises. That isn't to say that a trendy franchise can't be a profitable franchise, but if you want one of the most profitable franchises to own, the industries above, and specifically the franchises mentioned, are consistently money makers.
How to Find out How Profitable a Franchise Really Is
This can be difficult. Many franchisors are hesitant to give concrete numbers. In fact, a franchisor can't really guarantee anything. The reluctance is understandable because making outright claims or promises could lead to franchisee lawsuits. That's why franchisors will suggest franchisees read their Franchise Disclosure Document (FDD), which is a detailed prospectus required by law to give to interested investors. Item 19 of this document talks about the financial aspect of the franchise and gives an indication of the average revenue the franchisee can expect. This line is calculated ambiguously and can be such a wide range that pinpointing the actual profitability can be nearly impossible to do. These numbers are juggled to make the profitability of the franchise look good all the way around. It's a common practice and will happen with just about any franchise. The bottom line is, research as much as you can and don't rely only on what the franchisor claims. This is certainly a good place to start, but take your investigations further. If possible, talk to people who are already running the franchise you're considering buying. This may give you a more accurate picture of whether or not the profitability you're looking for is actually possible.
Tips for Finding a the Most Profitable Franchises to Own
- Ask questions. Don't rely on what the franchisor says. They aren't going to outright lie, but they can be ambiguous and speak in broad terms.
- Research online and read as many financial reports as you can regarding the industries you're interested in and specific franchises in those industries.
- Find industries and specific franchises that have a proven track record. Avoid trendy franchise opportunities that may not stay around.
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