Tag Archives: Franchising

Buying a Franchise – Know Your Market

Buying a Franchise photo

Photo by Blue MauMau

If you are thinking of buying a franchise you have many options to consider. From running your own sandwich shop all the way to an oil and lube shop, the options are many if you want to become a franchisee. The key is to find a company that allows you to live your passion and affords you the opportunity to make a living at it at the same time.

The most profitable franchises are not necessarily the ones that give you the biggest cut of the profits. While some people might tailor their buy in decision to the most profitable franchises based upon the way the numbers break down on paper a better way to look at things is which opportunities have the best chance of growing. Just because a company offers to give you thirty percent of the gross profits if those profits are limited by things like market saturation or customer demand then that thirty percent may not turn out to be such a great deal.

You are far better off opting to become a franchisee for a company that offers a bigger opportunity for growth. If there is limited customer demand for a particular item then your chances of developing an ongoing revenue stream are severely limited. If the market is already completely saturated in your area by a particular type of successful business then your chances of being profitable in that same niche are also severely restricted. For long term financial success you are better off becoming a franchisee for a company offers you a lower profit percentage but gives you room for growth and business building.

Buying a franchise is definitely a viable option for starting your own business. You just have to do your homework, know your market, and have the ability to follow your heart in order to be successful.

Selecting The Most Profitable Franchises to Own

Franchises photo

Photo by Dr Stephen Dann

When it comes to choosing the most profitable franchises to own, you have to first identify your passion. Your passion should earn you money and a good reputation. Of course, you have to do a lot of research, spend time and put forth a lot of effort when starting a franchise, but your efforts will be paid off if you choose sensibly. Very quickly, you should have more money than what you started with. Therefore, when you analyze the returns of Franchise Number A and Franchise Number B, you obviously go for the Franchise that gives you the maximum returns.

You could also seek the help of a franchise owner and ask him if owning such and such a business is profitable. You could ask him how much he makes in a year and whether his total revenue has been increasing or decreasing. There are business magazines that give accurate and honest analysis of the businesses that are profitable and those that are not. The businesses are usually rated on the following counts:

  • Number of years in business
  • Profits incurred
  • Financial strength
  • Initial costs
  • Growth chart, etc.

It may be that the franchise you have an interest in does not fare well on the list.

Restaurant based franchises are quite common as they make a lot of money. There are certainly some winning ideas when it comes to having a restaurant marketing strategy. There are professionals who will help you with this because the strategy should rake in new customers. Online marketing is the most important restaurant marketing strategy because more than 80% of the customers actually check out different restaurants before even thinking of dining in them.

If you are looking to start a franchise, then do a study of the company’s financial growth over a certain period of years. Then you have to qualify for becoming a franchisee with that company. The ROI on the most profitable franchises to own may not seem encouraging in the first year, but it could be the subsequent year.

%d bloggers like this: