When was the last time you made a fast food stop or purchased a coffee before work? If the brand is recognizable and has multiple locations throughout your city or town, like McDonald's or Dunkin', it's quite possible your favorite food joint is a franchise.
What is a franchise business?
A business in which independent entrepreneurs are able to use the rights to a larger company’s business name, logo, and products to operate an individual location. The franchiser is the owner of the larger company who sells the rights to license their business, and the franchisee is the third-party owner and operator of the business locations.
Maybe you've even considered purchasing and owning one yourself. But which franchises are best suited for your budget and skill set? I've compiled a list of the best franchise opportunities to select from.
Best Franchises to Buy
The UPS Store
Let's take a look at some of these franchises and see how they stack up. I'll review what each franchise requires in terms of the franchise fee and the initial investment you'll need to make. A franchise fee is a cost a potential franchisee pays up front to operate the franchise. And the initial investment amount includes expenses such as royalty fees, real estate, and inventory costs.
If you want golden arches of your own, you'll need to put in a hefty initial investment. But with that investment, you get brand recognition, popularity, and years of experience in the fast food industry.
Dunkin' dropped the "Donuts" from its name, but this business is as recognizable as ever with locations in 32 countries. It was rated #1 in customer loyalty by Brand Keys Customer Loyalty Engagement Index. And they support their franchisees with training and assistance with site selection, construction, operations, management, and marketing.
The UPS Store is the top-ranked franchise in the business services industry. It boasts financial stability, brand recognition, and dedicated training and support — and 84% of the U.S. population lives within 10 miles of a The UPS Store.
Over its 40 years of business, RE/MAX has grown to over 100,000 agents in nearly 100 countries. It's a well-known brand with a global presence, strong advertising strategies, and well-developed core philosophies.
This drive-in chain prides itself in operational excellence and its customer service. This brand keeps growing — its franchise owners saw the average gross sales-by-store increase from $1,072,000 in 2012 to $1,256,000 in 2018.
Great Clips has been in business for 30 years and provides its franchise owners with up-to-date technology and training. It has invested heavily in market research to provide customers with the best service and experience.
This quick service restaurant brand has been around for 50 years and developed financial stability and brand recognition. It has a proven operating system and gives you access to restaurant resources and a community of more than 350 franchisees who know the business.
Hardee's is a subsidiary of publicly traded company CKE Restaurants, Inc., and it's one of America's premier burger brands. It offers classroom and on-the-job training, as well as assistance with advertising, social media, SEO, website development, email marketing, and loyalty programs.
Sport Clips is growing and showing its strength and stability — it has a high continuity rate of 95.4% over the past five years. This means that out of all the stores that opened throughout the last five years, more than 95.4% of them are open today. It attributes this stability to relatively low startup costs, a solid support system, and continual monitoring of store performance.
The initial investment in a franchise can be pricey, and range anywhere from a few thousand dollars to over a million. If you're looking to purchase a franchise at a lower price point, there are options for you in a variety of industries.
Cruise Planners is a cruise planning agency. It's home-based, so you don't need to factor in the cost of real estate. Prior experience in travel planning is not required, and the company offers comprehensive training.
SuperGlass Windshield Repair has been operating for 30 years and specializes in the repair of rock damaged and cracked windshields. Overhead costs can be kept low due to its mobile option — a physical shop location is not required.
If you're looking to start a low-investment, exercise business a Jazzercise franchise might be a good fit for you. It offers various price points to begin a franchise and you can find the one that aligns with your budget.
Dream Vacations is a home-based travel agency franchise with no overhead or inventory — this keeps the cost of initial investment low. It's a great option for military veterans and offers discounted investment prices.
Below are some of the top picks from the best franchises to buy list. The key points the list looks at are the midpoint (average) initial investment, the franchise's growth rate over the past five years, and the number of franchise locations, or franchise units.
This fast-casual restaurant is known for its burgers and freshly-churned custard. After your initial investment and depending location and whether you're buying or leasing property, you can expect your restaurant to open in eight to 18 months.
Planet Fitness is known for it's Judgement Free Zone® philosophy — making first-time gym users feel comfortable as they begin their fitness journeys. This gym has over 14 million members and franchisees have a median annual operating income of $567,000.
School of Rock is the largest music education franchise in the United States and has more than 29,000 students worldwide. This music business was started in 2007 and is still growing — between 2014 and 2018, it added 70 units to its franchise system.
This bakery is unique because, despite being a franchise, it has a "Mom and Pop shop" feel. There are locations across the United States, and its cakes have been featured in popular media like Food and Wine Magazine, Food Network "Unwrapped", and Franchise Times.
Pure Barre is a popular, boutique fitness brand with nearly 600,000 clients. The business offers multiple revenue streams: bar classes and active wear. And it provides support and training for real estate, operations, consulting, marketing, and more.
Right at Home is an industry leader in home care and its mission is to improve the quality of life for its clients. It provides new franchisees with comprehensive training, and you don't need prior business or home care experience.
This math learning center opened in 2002, and its mission is to "help every child understand – and master – math." Mathnasium has earned many accolades, and over the past four years, average per unit gross sales grew 10% annually.
Most Profitable Franchises
Jimmy John's Gourmet Sandwiches
When you're evaluating a business investment, it's important to know if the opportunity is worth the money. The franchises listed above are seeing the largest growth in franchise locations over the past year, which is one of the key indicators of profitability. Determining the profitability of a franchise isn't an exact science, but there are a few factors to consider:
Unit growth: See how many units (franchise locations) have opened in recent years.
New franchisee success rates: Look at the percentage of new franchises that are still operating after a year.
Franchisor's financial statements: Analyze the franchise disclosure document and look at average sales per unit.
Whether you're looking for a low-cost franchise, or ready to go all-in on a high investment franchise there are options for you. To learn more, read about how to become an entrepreneur next.
Originally published Jan 13, 2020 7:30:00 PM, updated January 14 2020