Franchises are entrepreneurial opportunities that let you use the established brand and model of another company to start your business. I’ve personally explored how to start franchises like restaurants, gyms, and more, and I can tell you that the right franchise can set you up for serious success.
Take Chick-fil-A, for instance. It has become one of the most successful fast-food chains in the U.S. The average Chick-fil-A franchise brings in nearly $9.4 million in sales. That’s not just a good business — it’s a testament to the strength of their model. But here’s the thing: even with a great system, it still takes focus, effort, and strategy to make it work.
If the idea of owning a franchise sparks something in you, keep reading. I’ll share what I’ve learned about the types of franchises out there, the real pros and cons, and exactly how to get started on your journey to franchise ownership.
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Table of Contents
- What is a franchise?
- Advantages and Disadvantages of Starting a Franchise
- Types of Franchises
- What to Know Before Opting for Franchise Opportunities
- How to Open a Franchise
What is a franchise?
A franchise is your opportunity to step into an established business model with the backing of a well-known brand. As a franchisee, you’re buying the right to operate under the franchisor’s name, using their systems, products, and marketing — all tried, tested, and optimized for success.
Sure, fast-food giants like McDonald’s or Dunkin’ Donuts might pop into your head first, but franchises aren’t just about burgers and coffee. Think gyms, tutoring centers, cleaning services — the franchise world spans almost every industry you can imagine.
Here’s a stat that stopped me in my tracks: In 2024, there were more than 820,000 franchise establishments in the U.S., contributing a stunning $858 billion to the economy. This highlights the significant role franchises play in the economy, offering entrepreneurs a tested model for success.
But how do you decide which franchise is right for you? And what steps are required to get started? Before we answer these questions, let’s take a closer look at the benefits and challenges of starting a franchise.
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Franchise Startup Checklist
A step-by-step roadmap for launching a franchise, including sections for:
- Researching opportunities
- Evaluating personal readiness
- Securing financing
- And more!
Download Free
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Advantages and Disadvantages of Starting a Franchise
Advantages of Starting a Franchise
1. Existing Brand Awareness
Creating awareness for a new business is challenging. You need funds, tools, and a team. Starting a franchise curbs these limitations. Working with franchisors lets you leverage the enormous brand recognition they’ve built over the years with their funds, tools, and team.
2. Ready Customer Base
Franchisors are immensely popular. Using their name and branding makes your business the go-to location for customers who have loved the franchisor for years. That means you won’t struggle to find, acquire, and convince customers to trust your business.
3. Long-Term Returns
Franchisors usually have proven products and services. Their ability to stay long in the market suggests customers love what they offer. That means partnering with them gives you an excellent chance of generating long-term returns.
![](https://offers.hubspot.com/hubfs/Feat%20Image%20-%20Franchise%20Checklist.png)
Franchise Startup Checklist
A step-by-step roadmap for launching a franchise, including sections for:
- Researching opportunities
- Evaluating personal readiness
- Securing financing
- And more!
Download Free
All fields are required.
![](https://offers.hubspot.com/hubfs/Feat%20Image%20-%20Franchise%20Checklist.png)
Disadvantages of Starting a Franchise
1. High Startup Costs and Fees
Starting a franchise can be expensive. Depending on the brand, you’ll need anywhere from $20,000 to over $2 million to get started. For example, a McDonald’s franchise costs between $1.46 million and $2.50 million, while Wingstop ranges between $325,616 and $974,733.
Beyond startup costs, most franchisors charge ongoing royalties, usually 4% to 12% of your revenue — McDonald’s charges 4%, and Wingstop takes 6%. Some also add fees for advertising or flat monthly charges, which can eat into your profit margins.
Understanding these financial obligations upfront is key to making an informed decision.
2. Limited Ability to Innovate
Franchisors limit your ability to have creative control of your business. You can’t dictate your pricing, create new products or services, and decide on the product to sell. Some franchisors can even move your business to a new location to fulfill a business need.
3. Poor Financial Privacy
Most franchise agreements have a clause that lets the franchisor oversee the entire finances of the franchise. That means franchising might not be a great business idea if you detest people sticking their noses in your finances.
Types of Franchises
1. Restaurant
Restaurant franchises are among the most recognizable and sought-after in the franchise world. With over 33,000 full-service franchises in operation, this category dominates the market due to its universal appeal and proven business models. Chances are, your favorite burger, coffee, or donut shop operates under one of these franchises.
Examples:
- KFC
- McDonald’s
- Jersey Mike’s
- Dunkin’ Donuts
- Hardee’s Restaurants LLC
- Sonic Drive-In Restaurants
My two cents: Restaurant franchises can be incredibly rewarding but aren’t for the faint of heart. They demand significant upfront investment and come with complexities like staffing and compliance. The payoff? Scalable models and robust franchisor support that’s hard to beat.
2. Retail
Retail franchises span everything from convenience stores to specialty services — and especially thrive in high-traffic areas. There are around 165,000 retail franchises, making this a diverse and accessible category for entrepreneurs.
Examples:
- 7-Eleven Inc.
- The UPS Store
- Miracle-Ear Inc.
My two cents: Retail franchises do best in high-traffic areas with lots of repeat customers. If you like the idea of following a structured business model with clear guidelines, this could be a great fit. Just remember, competition can be tough, so picking the right location is key.
3. Business Services
This sector serves professionals and businesses with solutions that are often affordable to launch and operate. In just one year, the number of business service franchises grew by over 1,400, showing the steady demand in this category.
Examples:
- Great Clips
- Sports Clips
- Our Town
- Pay2Day
My two cents: If you’re looking for something more affordable and easier to manage, business services franchises are a smart starting point. They tend to run on a smaller scale, which makes them perfect for first-time franchisees.
4. Health and Fitness
With wellness on everyone’s mind, it's no surprise health and fitness franchises are riding a wave of growth. These businesses thrive on community and loyalty, often drawing repeat customers who align with their brand values.
Examples:
- The Joint Chiropractic
- Medi-Weightloss
- Massage Envy
- Planet Fitness
My two cents: I’ve seen how health and fitness franchises thrive when they create a strong sense of community and loyalty among their customers. They usually have lower inventory costs, but you’ll need to invest more in real estate and equipment upfront.
5. Real Estate
Real estate franchises offer trusted brands and proven systems, which are ideal for driven entrepreneurs who excel at building client relationships. The market, valued at $19.5 billion, is expected to grow to $36.66 billion by 2032, with a 6.7% annual growth rate.
Examples:
- NextHome
- RE/MAX LLC
- Keller Williams
- Realty One Group
My two cents: Real estate franchises are appealing because they come with trusted brand names and proven systems for generating leads and handling transactions. While they can be highly rewarding, be ready to handle market ups and downs and focus on building strong relationships with clients.
![](https://offers.hubspot.com/hubfs/Feat%20Image%20-%20Franchise%20Checklist.png)
Franchise Startup Checklist
A step-by-step roadmap for launching a franchise, including sections for:
- Researching opportunities
- Evaluating personal readiness
- Securing financing
- And more!
Download Free
All fields are required.
![](https://offers.hubspot.com/hubfs/Feat%20Image%20-%20Franchise%20Checklist.png)
What to Know Before Opting for Franchise Opportunities
Thorough research is the backbone of starting a successful franchise business. You need to find the right franchise that aligns with your interests, skills, and the needs of your community.
I personally think that passion plays a huge role in choosing the right industry. If you’re into food, restaurant franchises might be your sweet spot. Love fitness? A gym or workout studio could be the perfect match.
But it’s not just about what excites you — it’s also about what your community actually needs.
For example, if there’s a shortage of after-school programs in your area, something like Mathnasium, which focuses on tutoring, could fill that gap while setting you up for success. The goal is to connect your interests with a business that brings real value to the people around you. That’s how you create a win-win.
Another thing I’ve found invaluable: visiting local franchises and talking to the owners. Get the real scoop on what running the business is like — both the ups and the downs. You'll then have a clearer picture of what you’re stepping into and accordingly decide.
How to Open a Franchise
Now that you’ve explored a few franchise opportunities, it’s time to get down to the nitty-gritty. Starting a franchise is an enormous commitment, and there are a few things to consider.
1. Evaluate the costs.
Like any other small business, there are initial costs to getting your franchise off the ground. Here are some common startup investments:
- Franchise fee. The upfront cost you’ll need to cover to get started as a franchisee. From my experience, this fee usually falls between $20,000 and $50,000, though for larger franchises, it can climb to $100,000 or more. You need a clear financial plan before diving in. If that price tag feels daunting, don’t worry — options like SBA loans or bank loans can help bridge the gap and strengthen your initial investment.
- Equipment and supplies. Franchisors give you an idea of the required equipment and how to get it. Some even offer financing options for these initial costs. Ask franchisors if they have preferred vendors or partnerships that could help reduce costs.
- Real estate. The franchisor often recommends location types and can advise you on what will work best for your business. For example, McDonald’s has specific requirements for their locations (e.g., a building area of 4,500 square feet and on-site parking).
2. Create a business plan.
Before you finalize the franchise agreement, create a solid business plan.
Think of it as your blueprint for success, plus it's also needed when applying for loans or financial assistance. Your plan should include financial projections, market research, and an operational strategy tailored to the franchise you’re joining.
Pro tip: Use the HubSpot Business Plan Template to structure your plan efficiently and professionally.
3. Review franchisor requirements.
A franchisor often has requirements that a franchisee must meet before offering a franchise agreement. For example, 7-Eleven requires new franchisees to have U.S. citizenship or permanent residency, an excellent credit score, pass a comprehensive background check, and have retail experience.
Other common details a franchisor might consider include:
- Net worth.
- Industry experience.
- Cash available.
- Other sources of income.
These may vary depending on the industry you’re joining. Plus, it’s best to contact the franchisor you’d like to work with to get more details.
Pro tip: Make a checklist of all franchisor requirements to ensure you’re well-prepared before initiating contact.
4. Examine the franchise disclosure document.
A franchisor must provide you with a franchise disclosure document (FDD) before you both sign any contracts. It should include information regarding initial fees, estimated initial investment, and much more.
The franchise disclosure document provides potential franchisees with the information they need to decide on entering into a contract with a franchisor.
Pro tip: Pay close attention to section details about royalties, marketing contributions, and operational expectations. These can significantly impact your cash flow.
5. Review the franchise agreement.
Once the franchisor approves your application, they’ll provide you with a franchise agreement. You’ll sign this contract to become a franchisee and own and operate a business under the franchisor.
Pro tip: Hire a lawyer experienced in franchise agreements to ensure you understand the fine print before signing. It’s an investment but a worthwhile one.
5. Choose a location.
Next, you’ll need to find a place to set up shop.
Franchisors often provide recommendations for the type of space that will work best. You can either buy property or lease an existing space, depending on your budget.
Work closely with your franchisor to ensure the site meets their requirements and aligns with your business needs, such as adequate size and suitable traffic patterns.
Consider rent costs carefully and consult a legal advisor to ensure the lease is a good fit. Additionally, assess local competition to gauge the potential for profitability.
Pro tip: Conduct a competitive analysis of the area to understand potential market saturation and adjust your location strategy accordingly.
6. Start training.
It’s time to learn the ins and outs of the business. Franchisors offer training sessions to teach you and your new hires all you need to know about the products or services you’ll sell, their guidelines and policies, and the systems you’ll use.
Your franchise will often provide training on marketing, management, and business basics you’ll need to operate the business.
Pro tip: Bring key team members to training sessions to ensure they’re equally prepared to run daily operations smoothly.
7. Open for business.
Once your franchisor sends a representative to approve your location, it’s time to market your grand opening.
Franchisors usually have pre-determined ads, signage, and promotion ideas for the opening. They might even provide you with a corporate consultant to ensure the opening day runs smoothly.
Pro tip: Leverage social media platforms and community events to build excitement for your grand opening and maximize foot traffic.
Getting Started With Your Franchise
There’s nothing quite like the thrill of stepping into a business you’ve worked hard to build. The journey may feel overwhelming at times, but trust me, you’re more ready than you think.
You’ve done the research, created your plan, and laid the groundwork — now it’s time to embrace your new life as a franchisee. From my experience, the first few weeks will be a whirlwind of learning and adapting, but they’re also incredibly rewarding.
If you’re feeling inspired to start your own franchise, use the steps I’ve shared here as your toolkit. You've got this.
![](https://offers.hubspot.com/hubfs/Feat%20Image%20-%20Franchise%20Checklist.png)
Franchise Startup Checklist
A step-by-step roadmap for launching a franchise, including sections for:
- Researching opportunities
- Evaluating personal readiness
- Securing financing
- And more!
Download Free
All fields are required.
![](https://offers.hubspot.com/hubfs/Feat%20Image%20-%20Franchise%20Checklist.png)