A business franchises its brand along with its products and services once it looks to increase its market share as well as geographical reach at a lower cost. A franchise starts as a joint venture between the franchisor (the original business) and the franchisee (the one who buys the license from the franchisor). To learn about the best franchises to own, read on through 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, as a franchisee, you are buying the rights to use the franchisor’s intellectual property and resources for a certain amount of time. However, you will need to consider that there is very little room for error. Once you own a franchise, you will need to ensure brand reputation and maintain the standard of the franchisor.
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. You will need to take full advantage of the knowledge of the franchisor and always ask them to guide you. The franchisor, thus, 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. There are even certain franchisors who will test your capability before enabling you to deal with the franchise.
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 really 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.
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 you can 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:
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+|
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+|
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+|
Hope this article was helpful for you in getting 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 getting success. However, you will still need to ensure that you have researched the local area and the target market before you take a franchise of the company.
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.