An Entrepreneurs Guide To Finding The Top Franchise Opportunities
February 28, 2022
There are hundreds of thousands of franchise concepts available to purchase. Finding the best franchise to buy is no easy task, and the discovery process can be overwhelming for many.
To find the top franchises, you need to know the common characteristics that set the best opportunities apart from the rest. Continue reading to learn more!
Common Characteristics of the Top Franchises
Generally, franchising is a lower-risk route to business ownership. However, not all franchises are created equal, and it’s not always easy to separate the good from the bad. So, how can you identify the top franchise opportunities?
Effective marketing is at the core of every successful franchise. The top franchises offer national advertising campaigns and resources for local marketing efforts.
Franchise opportunities that lack a centralized marketing strategy leave all the marketing responsibilities to the individual franchise owners. You'll end up spending too much time on your marketing relative to the other aspects of your business.
Many of the top franchise opportunities offer protected territories in the markets that are viable for the business to succeed. Generally, inoperable markets are not available to purchase. During the discovery process, check if franchise opportunities are available in your desired market and whether territorial protections are offered.
Proven Business Model
A proven business model means that the business plan has been historically successful for existing franchisees. The franchisor should demonstrate consistent year-over-year growth to illustrate the earning potential for a new franchisee. Consider it a serious red flag if the franchisor is reluctant to share financial reports from previous years during the discovery process!
Franchise Industry Accolades
Franchise market research firms can help you identify the top franchise opportunities based on franchisee satisfaction, earnings potential, and more. A few examples include Franchise Business Review’s annual Top 200 Franchises and Entrepreneur’s Franchise 500. Consider these reports a litmus test for the top-ranking franchising opportunities demonstrating strength in areas such as training and support, franchisor-franchisee relations, and profitability.
Training and Support
The franchisor’s corporate team provides training on everything related to the business, from day-to-day operations to billing and financial reporting. Franchisors want their franchisees to be successful, so ongoing support and one-on-one business coaching should be available as well. After all, a benefit of franchising is tapping into the system’s collective experience within a proven business model!
The franchisor-franchisee relationship can determine success or failure, especially for first-time business owners or individuals with limited entrepreneurial experience. Ongoing communication and access to educational resources can improve business performance. Be sure to include questions around franchisee-franchisor communication when validating a franchise during the discovery process!