Building a business is hard. Growing a brand while managing day-to-day operations, keeping it profitable and still getting enough sleep? That’s nearly impossible for us mortals. Some businesses, like many consumer products, now come in something like a “plug and play” solution: a franchise.
Is franchising for you?
With rewards of plug-and-play, simplicity comes with a few downsides. Having a recognizable brand, a ready-made business plan, as well as training, can help you capitalize on market demand without spending long years (and a lot of money) establishing your business and brand.
On the other hand, if you thrive on seeing your name in lights, making ALL the business decisions while remaining completely independent in your work, and you’re not too keen on spending a few (more than a few) extra bucks on franchise fees then franchising may not for you, and you can probably skip the rest of this post.
Ideally, what you’re after is a franchise organization that offers you a clear structure for launching, operating and growing a business. They’re done the heavy lifting for you and will even present you with training and marketing material so you can ensure your investment is a success. All of this effort is strictly designed to enable franchise owners to earn more and spend less time and effort. Think about this as well, the U.S. Department of Commerce and other statistic authors of franchising have gone on to show that the revenue from franchise establishments actually accounts for more than one-third of all retail sales in the United States. Once you have that running around in your mind, you know you’re on the right path.
Before we discuss the criteria for choosing a franchise, let’s talk dollars and cents. It’s what makes the world go round, right? (Yes, that is a rhetorical question!) Keep in mind, your costs do not just include the cost of business before it becomes profitable.
Franchise costs vary greatly. From just a few thousand dollars to millions in initial investment and ongoing operational costs, depending on the industry and on how complete the business “package” is. Not to mention, of course, how big and strong the brand name is. Money talks when we’re talking about a franchise.
When choosing a franchise to invest in, you need to figure out if you have the necessary funds to buy in. Otherwise, you’re not making a smart business decision at all. You might need to take out a business loan, and that’s where you’ll need to crunch the numbers. A lot of numbers. If you’re a math lover, this is right up your alley. And if you’re allergic to numbers, listen up!
But the numbers are not more important than the non-monetary investment you will be making. At the end of the day, it’s up to you to decide if the time and energy you spend managing your business is worth the money you’re making.
One in a thousand
Thousands of franchises are courting potential franchisees across industries and geographic locations. But how can you choose the right one? Do a lot of research. After all, knowledge is power.
In your quest to find the one company to join, there are a lot of questions you need to ask yourself. The first Q, in my opinion, is: “What do I WANT to do?” Yes, before asking how much money you will make out of it, you have to know what you want.
Joining a venture you believe in, or selling a product you enjoy marketing, is much better than working in a business that goes against who you are. For example, if you’re allergic to dogs, then mobile pet grooming services might not be the perfect field for you to join. If you’re vegan, odds are you will not be opening a McDonald’s in your town.
Owning a franchise can be a great opportunity to turn a hobby into a profitable business or learn a new skill you connect to.
How are the top franchises picked? Well, Entrepreneur bases their choices on five pillars: cost and fees, size and growth, support, brand strength, and financial strength and stability. There are always risks associated with starting a business, but it’s important to know that top franchise opportunities will lend a hand when it comes to training, marketing, and so forth. Because they want to genuinely give you a fighting chance to make your investment a success.
The Good, the Bad and the Brand Name
Buying into a franchise is no simple decision, and as we pointed out above – there’s a lot of number crunching and many questions to ask. Is there demand in your area for the service you want to offer? Are there other brands competing for the same target audience? How much support and training does the franchise offer?
Do your due diligence in research, or you’ll end up paying for it later. In addition to in-depth Googling of the brand and corporation reviews, you want to be speaking to other franchisees working with the company. Don’t forget to check if the franchise is involved in any lawsuits or has been reporting financial trouble.
The list is long, but you can start yours with the questions offered by IFA, the International Franchise Association. This will help you wisely choose the franchise that is right for you.
In 2016, the franchise categories that showed most growth were fast food, cleaning services, hair styling and fitness centers. This continued in 2017, and 2018 was no different. Not that it’s 2019, some new franchise categories have popped up and have taken reign. Categories such as Asian and Mexican foods, beauty/grooming services, childcare, entertainment/recreation, electronics, pets and more are the franchise categories we should be paying attention to in 2019.
But your choice of a brand should not be based just on growth percentage and popularity. Your location, available capital and the answers to the questions previously mentioned should help steer you in the right direction.
But which brands are most likely to shine in high growth categories?
10 Hot Franchise Picks for 2019
Although the big and fat franchises like McDonald’s and KFC still rule the nation, the health trend seems to have an effect and people are moving toward Asian and Mexican cuisines rather than deep fried franchises.
The very first HuHot Mongolian Grill opened its doors in Missoula, Montana back in 1999, however it didn’t start franchising until 2002. The lure of creating your own stir fry sits better with consumers in 2019 than a trip to a deep fry restaurant.
Whether you’re in the United States or are traveling the world, chances are, you’ll encounter a Taco Bell restaurant. We aren’t surprised to learn that Taco Bell is ranked fourth in the Franchise 500! In addition, they plan to open 1,000 new franchise locations across the United States by 2022. Goes to show that you just can’t beat their tacos.
Another clear sign of the health trend getting stronger is the continued growth of gym and fitness franchises. Year after year, the fitness (“shake it”) category is one that isn’t slowing down anytime soon.
There’s no shortage of fitness franchises out there, each with their own gimmick. Anytime Fitness is a brand with a worldwide presence, and a global membership, which lets customers attend the gym closest to where they may be, at home or on the road.
Dance all the way to the bank! If a traditional gym is not your thing, and you’ve been dreaming of “Dancing with the Stars” – this is your chance to join a franchise that offers a fun alternative to the monotony of gyms. And get training and certification. Jazz hands!
The beauty and cosmetics industry is also being taken over by franchises, with hair styling services leading the way. This isn’t just a women’s trend either, plenty of brands cater to the man too.
The growth of this franchise has been fueled greatly by its efforts to get franchise owners to expand operations. So many Supercuts franchisees own more than one store, sometimes even up to five from the various brands included under Regis Corp., the owner of Supercuts. Currently it’s ranked 31st in the Franchise 500.
If you like sports and quick, simple hairstyles – Sport Clips is for you. One of the things they offer is a program to allow you to invest in a franchise without quitting your day job. And it’s ranked 17th in the Franchise 500 so you’re in good hands if you’re looking at Sport Clips.
68% of American households own a pet, statistics say, and almost all of them think of their furry, four-legged friend as a family. That’s why franchises who make it so easy to take care of furry pals have growing success year by year. Paw-some!
If the name didn’t give it away, Aussie Pet Mobile, was founded in Australia in 1996. Its franchises are all over the globe, including North America, Australia, Canada, Ireland, Greece and Cyprus. The franchise takes care of mobile pet grooming, but you had that figured out too.
Over the past few years, franchises that boast of fun have been popping up worldwide. Entertainment/recreation franchises like paint-and-sip studios, escape rooms, and DIY studios.
As the #1 franchise in the paint and sip category, Paint with a Twist has customers bring in their own wine as they are taught step-by-step how to paint of their 8,500+ copyrighted art pieces. The initial franchise fee is $25,000 per location and furthermore, they do offer a 20% discount if you’re veteran.
All supplies and materials are provided for you, you just need to choose a craft project (art, decor, gifts, or accessories). You can enjoy food and drinks as you create your own DIY project. They have adult and kids projects to choose from. To open a franchise, you need to complete a brief survey to find out if you qualify.
If you’ve given this blog post a quick once over and got to here then you may have missed a recurring theme. In industries where trust is an issue (and where is it not) franchises flourish. Customers like knowing what to expect for their money and, especially when it really counts, will prefer to play it safe. This is where the strength of a franchise brand can really come in handy. In fact, as long as you’re not doing business with competing franchises, you might end up owning several branches of different brands. And 2019 is the perfect time to do it.
Sure, we rattled off the 10 best franchises of 2019 but what about the worst? We will discuss them briefly, Forbes pushed out a very helpful list. In the United States, these are the franchises you want to stay from as the investment is less than $150,000: Donut Connection, The Growth Coach, American Express Travel, Guardsman Furniturepro, Curves, The Interface Financial Group, American Lenders Service Co., Real Living Real Estate, Realty World, and Supershuttle.
Now you’re armed with as much information as possible when it comes to choosing a franchise. Just remember, these are the key criteria when choosing a franchise, system sustainability, system demand, value for investment, franchisor support, and franchisor stability. Once you’ve ticked off all five factors, you are well on your way to investing wisely.