Franchise ownership is on the rise. Learn about the best types of franchises to own.
Franchise ownership is on the rise in the United States and across the globe due to the freedom, structure, and stability it offers to those who might want to avoid the potential risk and uncertainty involved in opening a business on their own. If you too are ready to make the jump into franchising, the first question you should consider is which franchise network to buy into.
The answer depends on your interests, the amount of money you’d like to invest upfront, and your location. However, there are some clear standout franchisors worth looking into.
Publications like Entrepreneur, Business Insider and Franchise Direct all publish yearly lists of the franchises they rank the highest. While the rating scales on these lists vary, they all have a few things in common. The franchises on their lists are well-known, stable, and offer good infrastructures that help their franchisees grow their business.
If you look at some of the most common names on these lists: 7-Eleven, McDonald’s, Hilton, The UPS Store, and Great Clips, you’ll notice a few things—they’re all recognizable brands, their logos are familiar, and you know what to expect when you walk into any of these businesses. Whether it’s in your hometown or across the country, these franchises have a business structure and plan that deliver quality and familiarity to their customers.
While new businesses often struggle with generating awareness and becoming well-known in their area, buying into a franchise system can help alleviate some of that struggle for the business owner. Established franchises are often known by name and that recognition helps drive customer traffic. If you’re opening a McDonalds, you don’t have to become known as the place for burgers– the name is already synonymous with the product. The franchisor has done much of the hard work for you.
Franchise rankings are based on network size, growth rates, years in franchising, financial strength, and overall stability of the franchise. Also taken into consideration are training programs, marketing efforts (which includes a presence in social media), and assistance available to franchisees. Because there are a number of factors that go into the ranking, and those factors vary by publication, check into the specific areas that you know are important to you. Whether that’s the training program offered, financial assistance for franchisees, or franchise and royalty fees.
Beyond those things, make sure you’re looking at the right industry. Many people think of fast food or quick service restaurants first when they think of franchises. If you’re looking beyond the food industry, there are a number of other franchises to choose from. When looking at the ranking lists mentioned or doing your own research, look for top franchises in the industry in which you’re interested. It doesn’t matter if there are 15 restaurant chains that are ahead of your franchise system if you’re interested in the shipping and packing business, for example. Find the industry that suits you and then look into the top franchises within that specific market.
When you consider investing with a “best of” type of organization, it means you’re more likely to be putting your hard-earned money into a business that can have lasting value, giving you the best possible start.