FRANCHISE HERALD
Wednesday July 8, 2020

updated - July 8, 2020 Wednesday EDT

Are Franchises a Good Investment? Expert Insight

Jun 17, 2020 11:01 AM EDT | By Staff Reporter
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Are Franchises a Good Investment? Expert Insight
(Photo : Are Franchises a Good Investment? Expert Insight)

In the U.S., franchise restaurants make up more than half of all fast-food restaurants. However, there's much more to franchises than fast food! Private mail centers, optical goods stores, weight-loss centers, and more can all be franchises. 

If you've dreamed of owning your own business, you might find yourself wondering: Are franchises a good investment? A franchise may look like an appealing way to succeed in many industries. However, you don't want to jump into business until you know it's a wise idea. 

We're here to help you decide if investing in franchises is right for you. Read this before you embark on that new franchise opportunity!

Investing in Franchises: Pros

There are many great things about owning your own small business franchise!

One of the top reasons for franchising is that the brand's name is already established. In many cases, you'll benefit from years of marketing and positive brand images. No need to convince people the brand is good -- they're already well aware. 

Franchising also makes getting started easy by providing you with the essentials. Many franchises provide you with their inventory and time-tested business methods. You won't need to reinvent the wheel with a franchise.

Franchising can even make hiring easy. Good employees tend to be more willing to work with brands they can easily research. Plus, there may be an established hiring practice in place for you to follow. 

Investing in Franchises: Cons 

While franchises are wonderful in many ways, there are a few drawbacks to be aware of.

While following a set business plan is good for some people, it won't work for every entrepreneur. If you like to do business your own way, you might find it hard to follow the guidelines of a franchise. Franchising means meeting certain corporate standards with your brand.

The start-up costs for franchising can also be high. While starting a business is always pricey, franchise fees can be especially steep. 

With franchises, you're also at the mercy of your location. Someone can decide to start the same franchise across the street from you, and there's nothing you can do. When you start a brand from scratch, you can sometimes benefit from the uniqueness not available in franchises. 

Which Industries Are Best for Starting a Franchise?

If the pros outweigh the cons for you, which industries should you look at?

The best industry for you will depend on location. 

For example, maybe your area is saturated with fast-food restaurants. However, maybe there's a high percentage of senior citizens nearby. In that case, you'd want to check out senior care franchise opportunities.

Look at the needs and demographics of your area, and you'll see which small business franchise makes sense for you!

So, Are Franchises a Good Investment? 

For many people, the answer to "Are franchises a good investment?" is a resounding yes!

The key to making franchising a good investment is to dive in wisely. Make sure you have appropriate startup capital, and are prepared to do things the corporate way. Most importantly, make sure your franchise niche is something needed in your area.

If you follow these guidelines, the pros of starting a franchise can absolutely outweigh the cons, and you'll have a good investment on your hands. 

Getting ready to own a small business franchise? Be sure to read the latest in our Featured Franchise section for tips to help you succeed!

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TOP 10 FRANCHISES OF 2020

  • RANK
    FRANCHISE NAME
    STARUP COSTS
  • 1nc
    Hampton Hotels
    $3.7M - 13.52M
  • 2nc
    Subway
    $85.2K - 260.35K
  • 3up
    Jiffy Lube Int'l. Inc.
    $196.5K - 304K
  • 4down
    7-Eleven Inc.
    $30.8K - 1.64M
  • 5up
    Supercuts
    $103.55K - 196.5K
  • 6up
    Anytime Fitness
    $56.3K - 353.9K
  • 7down
    Servpro
    $133.05K - 181.45K
  • 8down
    Denny's Inc.
    $1.18M - 2.4M
  • 9down
    McDonald's
    $1M - 2.16M
  • 10down
    Pizza Hut Inc.
    $295K - 2.15M
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