Franchise opportunities abound, with options available in several industries. However, profitability is vital for entrepreneurs who want to open a franchise. Let’s explore lucrative franchise opportunities for aspiring entrepreneurs and how to evaluate their profitability.
What is a Franchise?
Businesses become franchises to increase their market share across a larger geographical region at a lower cost. The franchisor is the original owner of the brand, and they sell the right to a franchisee to use their idea and sell their goods, using their trademark and business model. You can see these types of joint ventures globally in several industries. However, the food industry remains the most prevalent.
Profitability of Franchises
Not all franchise opportunities are profitable. Some have a distinct advantage because they have established brands, have proven processes and systems, and provide comprehensive training and support.
Others have huge networks that provide purchasing power and savings, meaning better profit margins and reduced expenses. Industry and market trends can also influence the lucrativeness of a franchise opportunity.
Finally, making an informed investment decision when exploring franchise businesses by considering the financial implications is vital. These include the money required for the initial investment and ongoing expenses like franchise fees and royalties.
Read more about what makes a franchise profitable in this article from Small Business Trends.
Explore Lucrative Franchise Opportunities for Aspiring Entrepreneurs
For entrepreneurs who want to open a franchise, these are the most profitable franchise opportunities and the initial investment required:
1. Anytime Fitness
If you want a franchise in the fitness market, then Anytime Fitness is a popular gym brand with a high revenue potential. The gym’s revenue comes primarily from membership fees for using the facilities and personal training. Anytime Fitness has a relatively low-cost investment ranging from about $389,000 to $785,000.
McDonald’s provides global franchising opportunities because it’s one of the most established names in the food industry. Currently, it has 40,000 franchisees and annual sales of $122.5 billion. Starting a McDonald’s franchise costs vary because you can buy an established location or multi-units. Expect to spend anything from $520,000 to over $2.5 million. However, this franchise guarantees global brand recognition, a loyal customer base, and excellent support.
For those that prefer the real estate market, REMAX operates over 9,000 real estate offices across the globe. The cost of opening a profitable real estate franchise ranges between $43,000 to $240,000.
4. UPS Store
The demand for shipping continues to increase, and UPS has made a name for itself in the courier market. However, the franchise also provides printing and related services to consumers, including businesses. The franchise has low overhead costs because it requires small spaces (there are also store-in-store locations) and has small staffing needs, meaning faster profitability. Expect to pay between $80,000 to $217,000 for a UPS franchise.
5. Jersey Mike’s Subs
Jersey Mike’s Subs franchise requires small locations and has minimal staffing needs, offering a fast return on investment. It’s a fast-growing sub-shop franchise with small sites that do not require a large staff. You will need an initial investment of between $144,668 to $786,233.
With nearly 3,000 franchises across the U.S. and Puerto Rico, Chick-fil-A estimated annual sales of $17.09 billion despite facing several controversies. The Georgia-based franchise remains a popular fast-food chain in America.
The former Dunkin’ Donuts, Dunkin’ serves low-cost donuts, beverages, and other breakfast goodies that have high-profit margins. Expect to pay anything from $527.,000 and up for a Dunkin’ franchise.
8. Sport Clips
The men’s hair-cutting franchise is a strong brand with 1,800 locations. The small business model of this franchise means that you don’t need expensive equipment or a huge inventory. If you want to open a Sports Clip franchise, the cost is between $266,300 and $439,500.
9. Express Employment Professionals
With 860 locations across the U.S., Australia, Canada, New Zealand, and South Africa, Express Employment Professionals provides their clients with staffing support and HR services. The staffing agency continues to see exceptional growth ($4.16 billion last year) and remains profitable since it has proven to meet the most demanding staffing requirements. Startup costs start at $100,000 and can reach $400,000.
7-Eleven convenience stores have global brand recognition and a dependable business model. According to the franchisor, the convenience industry is worth $650 billion annually, with a revenue flow of 24/7 every single day of the year. It’s challenging to place an exact cost on a 7-Eleven store because it depends on the location and if you are buying an established business.
11. Papa John’s
With 5,000 global locations, Papa John’s remains a successful pizza franchise since it requires small stores and minimal staffing. Startup costs range from $130,120 to $844,420.
12. Mac Tools
Selling tools out of a mobile truck keeps startup and ongoing expenses low. Each mobile store has an assigned route, and the company offers ongoing training and support to ensure you can offer your customers answers to all their questions. The affordable franchise startup costs range between $109,00 to $250,000.
Some Affordable Franchise Opportunities
There are franchise opportunities even for those of you with a small startup capital. These include the following:
· Mathnasium – Open a math learning center for kids with opportunities for multiple revenue streams. Costs range from $112,860 to $148,655.
· JAN-PRO – Take advantage of the growing demand for cleaning and disinfecting services with the JAN-PRO flexible model with an investment of between $1,250 and $50,000.
· Dream Vacations – Run a travel agency franchise from home to offer travel planning services with a startup cost of up to $10,000.
Tips for Choosing a Franchise
When considering which franchise to invest in, you must do your homework and research the industry trends. Ensure that the franchise has a demand in the market before investing. Also, find out what training and support you will receive from the franchisor and ongoing costs like royalties and advertising fees. With so many profitable franchises available, there is bound to be one to fit your budget.
Whether looking for a global brand or a low-cost opportunity, consider these top franchises when selecting a promotional item for your business or event. With the right franchise behind you, success is just around the corner!
Pros and Cons of Investing in a Franchise
Franchises are attractive investment opportunities because they often have lower startup costs than starting your business from scratch. As such, the chances of success and return on investment are higher. However, you do not own the franchise; you just run it under the franchisor’s name and branding. You will also be bound to certain rules set by that franchisor. Consider all these points before investing in a franchise.
Various factors depend on the profits of a franchise. These include the market, location, size, and other factors like running expenses. Franchises like MacDonald’s and Starbucks are among the most successful, thanks to their brand recognition and loyal customer bases, but these require a more considerable capital outlay.
Franchisees cannot guarantee you high profits, meaning it’s up to you to look for good opportunities and something that aligns with your interests within your market. Once you decide on the best franchise, remember that its success depends on your dedication and hard work.
What is the most profitable franchise?
The most profitable franchises depend on factors such as market size and location. Some of the top franchises include McDonald’s, UPS, Chick-Fil-A, Dunkin’, Sport Clips, Express Employment Professionals, 7-Eleven, Papa John’s, Mac Tools, and Mathnasium.
How much does it cost to open a franchise?
The cost to open a franchise varies depending on the franchisor and its business model. Some lower-cost opportunities are Dream Vacations, where you can start for up to $10,000, or JAN-PRO, with investments ranging from $1,250 to $50,000.
Are franchises a good investment?
Yes, franchises can be a great investment because there are lower start-up costs and higher chances of success. However, it’s important to research and ensure that your chosen franchise has a demand in the market before investing. You should also consider all other factors like training and support from the franchisor and ongoing costs.
What is the best franchise to buy?
The best franchise to buy depends on factors such as your budget, interests within your market, and desired return on investment. Ensure you do thorough research when selecting a franchise to make an informed decision. With so many profitable franchises available, there is bound to be one to fit your budget.