When it comes to being a business owner, not all opportunities are created equal. And though there’s something to be said for starting a business from scratch, don’t neglect the benefits that come with investing in a franchise.
Why Invest in a Franchise?
Franchising is often billed as a cash-friendly business model for the corporation, but there’s also a ton of value on the franchisee-side of things. If you’ve never taken the time to investigate franchise opportunities in more detail, now’s a good time to check it out.
Here are a few of the biggest benefits:
- Proven business model. Outside of brand recognition, the most significant advantage of owning a franchise is that you have access to a proven business model that’s been shown to work efficiently, effectively, and profitably.
- “Not only do franchisees benefit from the proven business model and reputation of a national franchise, but they also enjoy the established training, support, and marketing programs provided by franchisors,” VR Business Brokers of Charlotte explains. This allows you to properly equip your team and keep everyone on the same page.
- Marketing support. Marketing is resource-intensive. Not only does it require a ton of time, but it can also be quite expensive. And though it depends on the franchise, many offer some marketing support in the franchise agreement.
- Location selection. In many franchises, you gain access to a pre-selected location. Site build-out fees may also be taken care of. This removes a huge burden from your shoulders and allows you to focus on building the business.
- A franchise isn’t a perfect business opportunity by any means. However, it’s advantageous for a numerous reasons. As you look for ways to carve out a fulfilling career and build wealth, franchisee opportunities are worth exploring.
4 Franchise Opportunities Worth Exploring
There are more than 750,000 franchise establishments in the United States. Owning one of them isn’t that difficult. What’s more challenging is making sure you select the right one. Some of the best franchisors include:
When you look at the perfect model for franchising, McDonald’s should immediately come to mind. Started in 1955 by milkshake mixer salesman Ray Kroc, the internationally-recognized Golden Arches have become a symbol of tasty consistency throughout the world. The initial investment costs between $1 million and $2.2 million, but the potential payoff is far greater.
Look at any list of the best franchises in the United States and Dunkin – formerly known as Dunkin’ Donuts – will find its way into one of the top spots. The initial investment of $229,000 to $1.7 million is affordable when compared to some other major franchises – and you’ll need a minimum net-worth of $500,000 and $250,000 in liquid cash – but the payoff is well worth it. Nearly 1,400 units have been added in the past three years.
Chick-fil-A is, without question, one of the most successful fast food chains in the United States. It’s the most frequented fast food restaurant in 38 of 50 states and the average location brings in $4.4 million in sales per year. (For perspective, that’s $1.7 million more than the next best restaurant, Whataburger.) However, the one thing about Chick-fil-A is that it has to be more than an investment for you. As the website clearly explains, “The Chick-fil-A franchise opportunity requires that the individual be free of any other active business ventures and operate the restaurant on a full-time, hands-on basis.”
- Planet Fitness
Launched in 1992 by Michael Grondahl, Planet Fitness is one of the fastest growing gyms in the entire country. The franchise fee is $10,000 for a 10-year renewable agreement. However, the total investment lands somewhere between $700,000 and $3.8 million and requires the franchisee to have a net worth of at least $1.5 million (with $600,000 in liquid assets). If you want to open an “area” (consisting of five or more gyms), you’ll need an even larger net worth and access to more liquid cash.
Adding it All Up
Franchises aren’t for everyone. While they have their benefits, they also come with a unique set of challenges. Weighing the pros and cons accordingly will allow you to make an educated decision as you move forward.