How to Choose the Right Franchise for You
The million dollars question many are asking
by Jenifer Huston New
The International Franchise Association has consistently found that franchises tend to outperform the overall U.S. economy.
This means that by investing in a franchise you can expect, on average, to experience greater growth and significant protection against macroeconomic downturns like high inflation, low unemployment, and sluggish growth.
Even when congressional inaction threatens the prospects of some owner-operator individually owned businesses, franchises more often than not weather the storm fully intact.
The U.S. economy can also contract slightly and experience employment difficulties...and franchises can still end up doing better than ever. Franchise growth and employment need not follow the economy.
The primary reasons are that franchises bring an established business model to bear for its investors and allow franchise owners the chance to engage multiple revenue streams.
In addition, from start to finish the franchise model has been tested and retested. This means that from pre-opening site selection, training, and hiring to ongoing marketing franchises provide guidance shown to deliver consistent results for investors.
Choosing the Right Franchise for Your Needs
In many ways, the American dream has shifted from business ownership on Main Street to owning your own franchise location.
The reason is that franchising brings a proven business model to bear, yes, but the franchise model itself also tends to outperform the economy empirically. Another factor is the depth of franchise opportunities out there today.
QSR, Maintenance and Personal Care Quickest Growing
It will come as little surprise to investors who have really done their homework to discover the quick-service-restaurant sector of the franchise pie leading the way at 20.8% of total franchises.
Restaurants account for an astounding 104 companies within the Entrepreneur's Franchise 500 list of the top franchises. Rankings are based on size and future growth as well as financial strength and the systemic stability of that particular company's franchising endeavors.
As it happens, future growth potential and financial strength are a lot of what future investors care about most. Since that's the case, what other franchises are showing high growth potential over the next decade?
Going back to the number of Franchise 500 companies thriving in the franchising world, maintenance and personal care franchises had 12% of the overall franchising market, respectively.
Maintenance franchises are franchises that specialize in cleaning and restorative services, for instance, while personal care franchises might include gyms, fitness centers, and beauty salons acting in a franchise capacity.
So, although quick-service restaurants, maintenance, and personal care topped the list of growing franchises, it certainly doesn't end the conversation.
Have a Passion? Seek a Franchise!
Discovering your passion often requires a serious self-evaluation to determine your strengths and weaknesses as well as your values and desired future work schedule. It's often said that you'll never work a day in your life if you do what you love, and that's basically true.
Figuring out how many hours you want to devote into your franchise opportunity, how many people you want to oversee or whether you want to hire a franchise manager, and whether you need to go it alone are essential questions to ask.
A franchise broker can be an absolutely invaluable resource if you're a potential franchise investor who's fully bought into the franchise model and has the liquidity and net worth to make it happen. Franchise brokers can work with investors to ensure that they're tapping all of their resources while finding the ideal franchisee-franchisor fit moving forward.
If you already have a business up and running and are looking to expand that business through the franchise model, then you might, alternatively, benefit from working with a franchise consultant to actualize your dreams.
If, on the other hand, you actually want to become a franchise consultant yourself after getting years of exposure to the franchise industry, then know that there are business consulting franchises out there that combine business brokerage, franchise development, and franchise consulting in a way that creates constant and multiplying revenue streams.
There will always, for instance, be a need for business brokers to act as go-between intermediaries when buyers buy (and investigate) and sellers sell (and list) businesses.
Look for Recession-Proof Markets
The thing to realize is that choosing to the franchise doesn't limit your options whatsoever. Whether you've found your passion or are still searching for it, there's help available.
There's also great solace in knowing franchising opportunities exist in dozens of recession-resistant markets, such as hotels, automotive repair, quick-service restaurants, home improvement, pet care, and health. The options are as nearly infinite as the opportunities themselves.