I thought talking about franchises would be a timely topic because recent statistics reveal that since Obama has taken office small businesses are actually having a more difficult time making it. Consider the following: historically, studies reveal that over time eight-(8) in ten-(10) businesses fail, however, a recent study suggests that the number is now closer to nine-(9) in ten-(10.) By contrast, most franchises boast a failure rate of just 15 to 25% — although there are some franchises with higher failure rates.
If you understand business, have a great idea, can offer a product or service with a competitive advantage in the marketplace, I’m not discouraging someone from starting a business, but for those who don’t, franchises are a great alternative for the person who, let’s say, “has an entrepreneurial spirit, but lacks business experience.”
I looked at a few recent studies and those franchises that are growing the fastest and also have a good reputation among their franchise owners include the following: Subway, McDonalds, Taco Bell, Dunkin Donuts, Denny’s, Pizza Hut, Jack-In-The-Box, Kona Ice, Jersey Mike’s, Firehouse Subs, Jimmy John’s, Great Clips, Super Cuts, Sports Clips, Serv-pro, Vanguard Cleaning Systems, Jan-Pro, Anytime Fitness, Planet Fitness, 7 – 11, Hampton Hotels, Days Inn, Christian Brothers Automotive, and Sotheby’s. The truth is there are more good franchise ownership possibilities today than ever.
As most of the previously mentioned franchises require a sizable investment from $300,000 to $3,000,000 or more, there are many low cost, fast-growing franchises options. Top of the list is Cruise Planners, a travel planning franchise with a start-up cost just under five hundred ($500.00) dollars. Other affordable franchise opportunities are in real estate, child daycare, education, home inspection, and cleaning services franchises.
If you are a veteran, many franchises, furthermore, offer a veteran discount. In fact, there are a many veteran franchise owners in the food, real estate, cleaning, and senior care sectors.
You might be surprised to know that venture capitalists today own many multiple stand-alone franchise operations, in addition to multi-unit franchise operations, like the ones you see at rest stops along many interstate highways. Other recent industry trends include: franchise operators working out of smaller square footages and young talent managing several top franchises. For example, Burger King’s CEO Dan Schwartz, is just 34, and Cinnabon’s CEO, Kat Cole is only 32 years old. Franchises are also quicker to refresh their brands, store designs, menus/offerings, are constantly updating equipment & ingredients, and are aggressively cutting costs to be more competitive. Faster, healthier food franchises, like Freshii, and LYFE Kitchens also remain very popular.
The last point I’d like to make is that when looking into an investment in a franchise, do your homework. Talk to franchise owners. Check with the better business bureau, and read up on franchises. Entrepreneur Magazine publishes a lot of good information about franchises. Most important, make sure you closely read the Franchise Disclosure Document. When reviewing the Franchise Disclosure Document, you want to look at years in service, number of franchises, investment costs / fees, royalties, and if they offer financing, home-based & kiosk opportunities. I’d also recommend you do this with a legal and/or tax professional, because each state has its own franchise laws you want an expert to be able to fall back on.