Best Franchise Investments to Pursue

Many entrepreneurs dream of owning their own business. However, coming up with a business concept, creating a plan and seeing it through to execution takes a lot of time and money. That’s why many business owners turn to franchises. 

A franchise provides the best of both worlds to many entrepreneurs. You get to own and operate your own business but have the upper hand of already having an established market and plan. But with so many franchise chains out there, how do you choose which one to pursue? To choose the best franchise investment, you’ll need to consider your minimum investment capabilities, the returns you’re looking for, the market you’re in and what sort of business you are interested in. 

Are Franchises a Good Investment?

Franchises are attractive to many investors and business people. They allow people to open their own businesses and reap the benefits that come with it. But there’s less risk because the business is typically already well-known and trusted. The franchise company will probably also provide things like construction plans, vendor connection, training processes and the overall business model so that you’re not operating completely alone.

Whether a franchise investment is good or not depends on the company. Some franchises may be more well-known and achieve better returns than others. Investors need to conduct deep research into a franchise before deciding to partner with it and open their own location.

Franchises may also not be for business owners who want full creative freedom within their business. When opening a franchise, business owners will be expected to follow the franchise’s policies and ways of operating. Franchises can provide great resources and take the heavy lifting off the investor, but they can place limitations on what the business owner can do.

Top Franchise Investments for Different Budgets

Franchises range from low-cost and mid-range to high-end. The amount you’re willing to invest determines which of these types will be accessible to you. Here are some of the best franchise investments in each category.

Low-Cost Franchise Opportunities

A low-cost franchise is a company that allows investors to start their own location with less than $50,000 in initial investment. These opportunities can work for entrepreneurs who don’t have a lot of extra capital; however, they may come with fewer resources to help guide your business to success.

• Complete Wedding + Events: Weddings are a huge industry, and for $10,000, business-minded people can tap into that industry for their own profit. Complete Wedding + Events provides franchisees training on how to plan weddings, with resources on everything from hiring professionals to pricing. This franchise will not include a brick-and-mortar location, however, and franchisees will be responsible for finding their own clients.
• Dream Vacations: This travel agency is a great franchise for investors who love to travel. For under $20,000, Dream Vacations will train you on how to create your website, get customers and market your business. After that, you’ll be responsible for running this home-based business. Dream Vacations businesses make about $330,000 annually on average and pay 1.5-3% in royalties. 
• Image One: This commercial cleaning company allows investors to own their own location for only $15,000. Included in that initial investment is training on cleaning methods, supplies and billing processes. This franchise does not include a physical location. On average, Image One makes about $200,000 annually and requires $10,000 in royalties.

Mid-Range Franchise Opportunities

A mid-range franchise investment will provide a bit more support to their franchisees and typically include a physical location. These franchises require anywhere from $50,000 to $250,000 in initial investment.

• Huntington Learning Center: This education-based business is the nation’s leading K-12 tutoring center. Investors can start their own location for $150,000 to $200,000 and receive training, marketing, and operational support. Business owners will then hire their own staff to operate their daily business. Huntington Learning Center has grown 33% from 2009 to 2018 and appears to be continuously growing. 
• Anytime Fitness: This gym is a popular fitness location that’s continuing to grow. Investors can open their own location with a $42,500 initial fee and ongoing payment of $699. Then investors need to purchase a location, hire staff and equip the facility. Locations typically make a couple hundred thousand each year.
•  College Hunks Hauling Junk: Take part in a revolutionary way to move and remove junk with this franchise that is purpose-driven and technology-enabled. For $100,000 to $270,000, you can open your location and receive training on how to get customers, hire staff and operate your business. 

High-End Franchise Opportunities

High-end franchises will have the highest initial investment but are typically well-established companies that have an extremely effective franchise process and a lot of marketing support.

• Pet Supplies Plus: Assist local pet owners while growing your wealth with a Pet Supplies Plus location. Investors need anywhere between $500,000 and $1.5 million to open their location. However, one location will offer many services such as retail, grooming and self-serve bathing. 
• Sola Salons: Sola Salon owners act as business owners and a landlord. Within one Sola Salon location, multiple small salons and spas can rent rooms and chairs. The initial investment is up to $1.7 million, but investors will be able to rent out the space to many tenants and reap the benefits.
• Orangetheory Fitness: Orangetheory aims to revolutionize fitness with heart-rate-based fitness. It has an effective franchising model with proven business results. Franchisees will get loose plans for their space, marketing and training in services. However, the initial investment may be up to $2 million.

Factors to Consider When Choosing a Franchise Investment

In addition to choosing a strong franchise based on your minimum investment requirement, you should consider other factors before choosing a franchise investment. 

Strong Return on Investment (ROI)

Before investing in a franchise, you want to ensure it’s profitable. Check its historical data on the average revenue of location revenue. Consider the investment cost and projected income to ensure you’ll get a strong ROI. 

Market Demand and Trends

Consider overall market demands and trends, especially in the area you’re hoping to open a business in. For example, if there are not many fitness centers or gyms in your area, that might be a good market for those services. Identify the needs in your area and trends of local consumers to inform your franchise decision.

Franchise Reputation and Brand Strength

The benefit of opening a franchise location is that the brand name is already well-known. Ensure you choose a franchise that has a good reputation in your area and strong branding and marketing. These things will make it easier to attract customers and boost your sales.

Initial Investment Costs and Ongoing Fees

Some franchises have higher initial investment costs. When considering a franchise, ensure you can afford the investment cost and that the brand reputation and support you’ll receive are worth it. Additionally, franchisees will be required to pay royalties or ongoing payments to the franchise company. Investors should review these before committing and make sure they’ll still be able to achieve the profit they expect.

Support and Training Provided by the Franchisor

Another attractive feature of franchises is the support provided by the franchisor. Before investing, review the training and support that the franchisor will provide. It should give you all the tools you need to operate independently. If its support is sub-par, it may not be the best franchise to join.

Industry Growth Potential and Long-Term Sustainability

You don’t want to invest in a stagnant business. Ensure that any franchise you’re considering not only has strong historical returns but also long-term growth potential. You want a business that will have continuous demand and will persist through all stages of the economy. 

Become a Business Owner

Take the next step in your career and portfolio and become a business owner by partnering with a reputable franchise. Franchises can be a great way to reap the benefits of owning a business but with the added support of the franchisor and an established brand name. Ensure you conduct thorough research into the company, its growth potential and reputation before taking the next steps toward opening a franchise location.

Frequently Asked Questions