The Top Franchise for YOU! If you are looking to invest in a small business franchise finding the top franchises can be quite a challenge. The definition of a top franchise is also a tricky question.
What is your definition of The Top Franchise?
Is it the most popular franchise?
Is it the most profitable franchise?
Is it the most fulfilling franchise?
Figuring out what your definition of the best franchise is the first step in your evaluation process. Many may think that the top franchise may be the one that is opening the quickest across the country. In some cases that may be true, but it is also something to cause concern. Can the franchisor handle this large growth this quickly? What about working capital for the franchisor, the number of trainers available and how the training is handled. Do they come to you or do you go to them? How much experience do the trainers have? Does the company have a system for you to talk to other franchisees? Being able to talk to others who have been there longer than you can be VERY helpful.
Is this a franchise fad? Think Orange Julius, Meal Prep Stores, E Bay Drop off stores, Video Games Stores, Kids Indoor Play Areas (Discovery Zone), 30 Minute Fitness places, etc. Are there enough clients for this many stores? Currently the frozen yogurt and cupcake craze is on! There are so many different brands, how do you choose, and how many can a city hold? Ask the franchisor if they are talking to other potential franchisees in your area. What would be the size of your territory? Call competing franchises and ask the same questions.
Is the franchise that you are considering one with staying power? Can it be replaced by the internet? Will the consumer tire of its offerings?
The Most Profitable Franchise - for some this may be the definition of a top franchise. Being the Most Profitable franchise is difficult to determine. The FTC regulates what can be disclosed and talked about with a potential franchise buyer. The reason for this is what you make is dependent on many different variables. The demographics of your location, the location itself, the current economy, how hard you work, the training and support that you take advantage of, the amount you spend on marketing, and the list goes on!
So looking at a franchisors Item 19 on the FDD is a start to determine this. However asking questions of current franchisees may help you determine profitability. But what you need to ask is what efforts they have put into growing their business. There are many types of franchises. There are those where a franchisee must sell himself and his personal services to customers (think business coaching, etc.). There are brick and mortar franchises - you build it and they will come - however, you had better build it in the right location! There are service businesses that are home based and provide a product that must be marketed by you, etc. So think about what it would take to be successful in this franchise business and ask questions about that. If it is a newer franchise without many franchisees then ask the business founder what they did to become so successful and how much help they offer you to do the same. The most profitable franchises are continually developing to help your profit margin continue to grow. Ask the franchisor about development plans. Think Pizza Hut, McDonalds, etc. they are constantly offering new producst to help franchisees continue to grow. Does the success or failure of this franchise solely depend on your ability to sell? If so, taking an honest evaluation of your skills is a must. Can you hire this? Is there enough profit to hire management?
Is the Top Franchise the most fulfilling one for you? It may be that money is the sole fulfullment factor for you - if so then you may just want to look at profitability alone. However, we at Shear Madness Haircuts for Kids have found that most business owners are much more successful if they LIKE what they are doing! What would be fulfilling to you? Do you want to provide many jobs for others? Do you want to provide a service to others? A product? Do you enjoy helping others grow, or offering a place for customers to enjoy? All these and many more questions go into evaluating the top franchise for you. There are a thousand or more franchise options, finding one that is Top for you is possible.