There are few sectors that seem as complicated as franchising if you’re looking to start a business or buy into a franchise opportunity.
After all, it is an industry with many moving parts, and it’s a business model that’s been around for a long time, so it is almost impossible to put all its facets into just one article.
With that in mind, here are just seven things you might not know about the franchising world; from the brands that are currently sitting at the top, to the experience an entrepreneur will need to run one of these businesses.
Food Franchises are Still King
Every year, Franchise Direct names the Top 100 Global Franchises and every single year, food franchises dominate the top of that list.
Of course, when you think about it, this makes total sense; when you are looking for comfort food, you want a brand you know and trust—especially when you’re away from home. Most of the brands that are at the front of your mind (and soon to be at the tip of your tongue) are franchises.
This year, the top ten on Franchise Direct’s list included eight organizations that could be described as food franchises, one convenience store franchise and one hotel franchise.
Of course, just like with any business, running a franchise requires hard work and a solid business plan to be successful. Nonetheless, there is little doubt that the brand recognition the higher-profile companies provide is of a huge benefit to those who invest in franchise systems.
If you’re looking for sample business plans for food franchises, check out this free, downloadable pizzeria franchise sample business plan, or this sandwich shop franchise sample business plan to help you get started on writing your own plan.
Fitness franchises are also growing
Fitness companies tend to be among the highest-ranked franchises in Inc.’s 5000, which for those of you who aren’t familiar, is a list of the fastest-growing, privately held companies in the U.S.
People are becoming more self-aware about their overall health. The brand familiarity that comes with a gym or fitness franchise means that it’s often the first answer for folks who are wondering where to turn.
The fact that fast food franchises are also incredibly popular, would suggest we all turn back every now and again too.
No Experience Required
What do you need to know about how to start a franchise? Did you know that there are quite a few organizations you can become a franchisee in without any prior industry knowledge?
It’s not just the obvious ones either, like vending machine companies and other low-cost franchise opportunities. For instance, the home services sector is on an upward curve right now and many of the organizations operating within this industry are crying out for enthusiastic franchisees who are willing to learn.
Believe it or not, even the fitness sector has several franchises that don’t require prior industry knowledge from an investor; you don’t have to be Arnold Schwarzenegger to be a fitness franchise owner, so you can say “Hasta la vista, baby” to that notion!
Very often, franchises are comfortable taking on franchisees without experience because they are confident in the training they provide. They believe that after a hardworking entrepreneur launches the systems they’ve been taught, that person will have everything they need to run the business successfully, no matter their background and experience.
Not all about the money: mission-driven opportunities
When a person decides it is time for a career change, there is a list of contributing factors; one of them often that the person wants to move into an area where they feel like they are making a difference.
These people are mission-driven, looking to make a real change in their customers’ lives.
Healthcare, education and more recently, edutainment franchises are one way to meet that desire to make a difference without starting completely from scratch.
Of course, many of these operations have large revenue streams as well, but they have also proved to be popular with investors looking to create a sincere societal change.
Most franchises require royalties
Like any big decision in life, there are some advantages and some disadvantages to purchasing a franchise business.
One of the disadvantages of the franchise model is that, except in rare circumstances, the franchisee pays royalty fees to the franchisor.
This is a fee for the use of the franchisor’s trademarks and many other elements of their pre-existing business. It is an understandable cost, as the franchisee is using processes that are often already proven to work.
The Road More Travelled
Making the leap to becoming your own boss can be a costly experience, but there are options to make that move that little bit cheaper. The choice between starting your own business or buying into a franchise is worth weighing carefully.
Of course, if you are choosing to do it on your own, you will have to carve out your own path and this will come with learning curves.
However, if the road of the franchisee is more your kind of thing, then there are plenty of low-cost options available, and one of the best things about many of these options is that they’ve been proven to work by others.
Selling Can Be Easier
One thing many business people simply don’t know is that when a franchisee decides they would like to sell their business, many franchisors help their franchisee find a new buyer.
Of course, there is often a fee involved in this process, but that doesn’t negate the fact that the seller gets to work alongside experts to help them resell their franchise.
This is a nice added perk, particularly for someone who wants help every step of the way.
These are just seven of the trends and facts about franchising that you may not know. It’s an ever-changing world, with many great opportunities that can be taken advantage of.
For more information on it, check out the Franchise Direct resource centre.