Franchising is a very appealing investment option for many entrepreneurs. It’s a turnkey business with many advantages. You put in the time, work, and finances and in exchange, you hit the ground running with training, marketing, and support services from the franchise to successfully operate your new venture. However, there are more than 770,000 franchises in the U.S. alone, so how do you choose the right one? If you are looking to become a franchisee, but want to make sure you join a profitable franchise with the potential for success, there are five key concepts to look for.
Five Things to Look For
First and foremost, you want to partner with a franchise brand who has franchisees who are turning a profit. This is business and you are there to generate income. You might assume a big brand with name recognition makes the most money, but assumptions can be risky. Instead look at the facts. Experts will tell you to analyze a franchise’s future profitability. For that, you need to understand item 19 of the franchise’s franchise disclosure document (FDD), which outlines the business’s financial performance. Unless you have expertise understanding a business portfolio, it’s also a good idea to consult an accountant or lawyer to help you understand the document. Look at the cost-benefit analysis, if the franchise is performing well, odds are so are the franchisees.
Digging deeper to understand franchise profitability, there’s no special formula to follow, but there are things to look for as a potential franchisee. For example, does the franchise appropriately replicate itself in all locations? Brand consistency is important for customers who have standard brand expectations. See if the franchise is appealing to a wide variety of customers. Is their product or service in demand? Examine the adaptability of the brand with changing trends or through swings in the overall economy.
2. Franchise System and Model
It’s crucial to have a big picture, objective look at a franchise. Research the level of growth since it’s been in business. As a franchise expands with more locations in more territories, the number of customers interacting with the brand will naturally increase. That allows the customer base and brand loyalty to grow as a result.
You will want to learn more about the business model and its success rate. Will the franchisor assist with daily operations, marketing, location, training, market analysis, and customer base development? Keep in mind, while franchisees buy in to a proven model, that’s not to say there isn’t work involved. It’s up to the franchisee, like any business owner, to grow the business, with the guidance and support of the franchisor. If that relationship is strong and valued, it’s certainly a good sign.
3. Market Opportunity
Generally speaking, the bigger the brand name recognition, the bigger the customer base. But there are plenty of medium and smaller sized franchises that have a strong reputation among their customers and target audiences. You will want to look at how they have saturated the market. Does the franchise have many locations or are they growing? How do they compete? Is this a niche franchise or does it have wide appeal? Does the franchise provide for protected territories? How does it measure up to the competition? It’s important to see how well the franchise performs in a good economy and whether they are recession-proof.
4. Company Foundation
You will want to examine how long the business has been in existence, and how long it’s been franchising. This is a strong determining factor in your investment. You need to know how well the franchise model works and how equipped you will be as a franchisee. Look at the work ethic and business savvy of the franchise owners and management team, those are trickle down characteristics important to franchisees.
Many franchises do not require any special educational background to become a franchisee, although they may indicate that business experience is preferred. Certainly, understanding how to operate a business is an essential indicator for future success. It’s a big investment, so the more you know, the better your chances for success. Look into the training program provided by the franchise and whether or not its adequate. And self-reflection is paramount, is this a business that you feel that you can successfully own and operate given your own past experience and passion?
It is pertinent to talk to other franchisees about their experience and amount of support received by the franchisor. Find out if the training was ample preparation to opening their location. Discover how much guidance and daily assistance is given after the grand opening.
5. The “It” Factor
When choosing a brand to partner with, look for that stand out quality. Contractually, signing on to become a franchisee can be a long- term commitment, so it’s best to find a business that you believe in, and are passionate about. As an entrepreneur, this will be a huge time and financial responsibility, it’s important to do something you love. Basically, this is your why. This is the element that can be the deciding factor when choosing a profitable franchise. There are franchises in every sector, find a franchise to focus your energy on that truly interests you.
WBU: A Proven Profitable Franchise
If you are looking for franchises that make the most money, consider more than profitability and include ownership enjoyment. That’s what the franchisees at the 350 Wild Birds Unlimited locations have done. Wild Birds Unlimited is a franchise designed to provide backyard bird enthusiasts the opportunity to enjoy the wildlife in nature. As part of a growing industry, WBU franchisees enjoy success in markets across the United States and Canada.
We are a strong franchise that’s been around for 40 years with continued steady growth. We provide unrivaled training and support, complete with business coaches, financial education, nature and hobby education, marketing, merchandising and purchasing, human resources, technical support, and a community connection to other Wild Birds Unlimited franchisees.
If you want to partner with a profitable franchise that checks all the boxes like brand recognition, customer satisfaction, a proven model providing training and support, perfect for hobbyists and nature lovers, then fill out this form and come fly with us.