A business franchises its brand along with its products and services once it looks to increase its market share and geographical reach at a lower cost. Basically, a franchise starts as a joint venture between the franchisor (the original business). On the other hand, the franchisee (the one who buys the license from the franchisor).
Hence, to learn about the best franchises to own, read on to the end of the article.
In this article, you will learn about the best franchises to own in 2023. We will share the details of some of the best options that are sure to give you returns. However, before we give you a list of the best franchises, we will share with you what to look for in a franchise before you own one and start doing business.
What To Look For Before Owning A Franchise?
According to Business News Daily,
“A franchise agreement is a binding legal document between a franchisor and a franchisee outlining the expectations, obligations, permissions, and restrictions of operation. It also provides a schedule of the fees that the franchisee will pay to the franchisor, including amounts or percentages and the frequency of payments.”
With the franchise agreement, you, as a franchisee, buy the rights to use the franchisor’s intellectual property and resources for a certain amount of time. However, you must consider that there is very little room for error. Once you own a franchise, you must ensure a brand reputation and maintain the franchisor’s standard.
Hence, it is important to correctly choose the franchise before you buy the rights of it. The following are some of the major aspects you will need to consider before you choose the best franchise for your business:
1. Support System
A benefit of owning a franchise is that you will not need to worry about the brand. This is because it is already established. Hence, you must take full advantage of the franchisor’s knowledge and always ask them to guide you. Thus, the franchisor must have a strong support system to help you in times of need.
2. The Franchisor Cares About Your Success
The franchisor must care about your professional growth and success in the local area. Even certain franchisors will test your capability before enabling you to deal with the franchise.
3. Professionalism
The best franchises come at expensive investments up-front. Hence, you must expect top-end professionalism from the franchisor. Check their professionalism regarding how they handle your requests or how they answer your calls. Check whether they take you seriously or not.
4. Mutual Expectations
As a franchisee, you will need to be clear about what the franchisor expects from you or what you expect from the franchisor. The deal that is happening between both parties must be a good fit in either case. Here, you will need to think long-term and consider whether you are truly ready for the commitment.
5. Sales And Business Approach
You will also need to consider other approaches of the franchisor, like sales, marketing, and advertising. Check through research whether these methods that the franchisor recommends you be successful in your case or not. These methods must go with your local market.
6. Reviews
Checking the reviews of other franchisees will go a long way for you to get information about how good the franchise is. You can just ask another franchisee owner or check online reviews related to the franchisor’s services.
The Best Franchises To Own In 2023
According to Yahoo Finance,
“While franchises seem to be a lucrative source of income, they come at a high price as there usually an initial investment that is required in order to open the business. In order to become a franchise owner, each business establishes its own set of conditions, which typically include an initial franchise fee, a minimum net worth requirement, and a minimum liquid assets requirement.”
The following are some of the best franchises to own in 2023:
1. McDonald’s
The following are the franchise details about McDonald’s:
| Initial Investment(s) | $1.40 to $2.5 million + an initial franchise fee of $45,000 |
| Franchise Fee | Royalty fees: 4% Ad royalty fees: 4%+ |
| Financial Requirements | $100,000 (Cash) |
| Total Number Of Franchises | 40,000+ |
2. Chick-fil-A
Here are the major franchise details about Chick-fil-A:
| Initial Investment(s) | $518,385 to $2,803,435 |
| Franchise Fee | Royalty fee: 15%+ (Takes 50% of all profits) |
| Financial Requirements | $10,000 Initial Financial Commitment |
| Total Number Of Franchises | 2928 |
3. United Parcel Service (UPS)
The following are the franchise details about The UPS Store:
| Initial Investment(s) | Traditional locations: $240,959 to $508,472Store in-store locations: $80,357 to $216,148+Rural locations: $206,423 to $459,136 |
| Franchise Fee | Royalty fee: 5%Ad Royalty Fee: 2.5% |
| Financial Requirements | Minimum $75,000 (liquid assets) |
| Total Number Of Franchises | Nearly 5000 |
4. Papa John’s
Here are the major franchise details about Papa John’s:
| Initial Investment(s) | A one-time franchise fee of $25,000 |
| Franchise Fee | Royalty fees of 5% (monthly net sales) |
| Financial Requirements | Minimum Net Worth: $750,000Minimum Cash/ Liquid Assets: $250,000 |
| Total Number Of Franchises | 5000+ |
5. 7-Eleven
The following are the franchise details about 7-Eleven:
| Initial Investment(s) | $70,000 to $1.2 million + an initial franchise fee of $0 to $1 million |
| Franchise Fee | Royalty fees: variable Ad royalty fees: 1% |
| Financial Requirements | $50,000 to $250,000 (Cash) |
| Total Number Of Franchises | 77,000+ |
6. Taco Bell
Here are the franchise details of Taco Bell:
| Initial Investment(s) | Depends on the location Mostly between $500K to $3 million |
| Franchise Fee | $25K to $45K |
| Financial Requirements | A net worth of $1.5 million |
| Total Number Of Franchises | 7936 (2024 data) |
7. Jersey Mike’s Subs
The following are the major details about Jersey Mike’s Subs:
| Initial Investment(s) | $178,523 – $746,342 |
| Franchise Fee | Initially: $18,500 Ongoing: 6.5% Royalty: 5% |
| Financial Requirements | Net worth of $300,000 |
| Total Number Of Franchises | 2720 |
8. Popeyes Louisiana Kitchen
Here are a few essential data on Popeyes Louisiana Kitchen:
| Initial Investment(s) | $380,000 to $3,000,000+ |
| Franchise Fee | $50,000 |
| Financial Requirements | A net worth of $1,000,000 |
| Total Number Of Franchises | 3067 (As of 2024) |
9. Dunkin’
The following are some of the essential details of Dunkin’:
| Initial Investment(s) | $121,000 – $1,810,000 |
| Franchise Fee | $40,000 – $90,000 Royalty: 5.9% |
| Financial Requirements | $250,000 to $500,000 |
| Total Number Of Franchises | 9593 (as of 2024) |
10. KFC
Here are the general franchise details of KFC:
| Initial Investment(s) | $255,600 and $3,163,550 |
| Franchise Fee | $22,500 |
| Financial Requirements | Net worth: $1.5 Million Liquid Assets: $750,000 |
| Total Number Of Franchises | 4282 |
How To Choose The Best Franchise?
Here are some of the few things you need to consider before you choose the right franchise for yourself:
- Check your personal and business goals before choosing. Also, consider your strengths and weaknesses.
- As most of these franchises are food-based, you will need to figure out whether you really want to operate in the industry. There are franchises in other industries as well.
- Decide on what role you want to play in the business.
- Choose based on your investment budget.
In general, food franchises are some of the best types of franchise options. This is because when people are hungry, they visit their closest store to have food.
Final Thoughts
Hence, you now have a better idea of the best franchises to own in 2023. If you choose one of the aforementioned ones, you will have a higher chance of success. However, you will still need to ensure that you have researched the local area and the target market before you take a company franchise.
However, before you sign the franchise, make sure to read all the legal agreements that outline the obligations, expectations, permissions, and restrictions. Do you have anything more to add regarding how to choose a profitable franchise? Share your ideas and opinions with us in the comments section below.
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