For all aspiring entrepreneurs who want to know what franchise business to start, we have outlined a few steps that all franchisee applicants must pass before signing a Franchise Agreement. Franchising offers an entirely different concept than an independent business, and all potential franchise owners must do in-depth research to evaluate opportunities in the right way.
After you pass all of these steps, it will be clear what franchise business to start. Today there are more than 4,000 franchising opportunities, and they all have their advantages and disadvantages. So you must do your homework because if you choose the wrong franchisor, that is a secure path to business failure.
How to Choose What Franchise Business to Start
1. Find your ideal franchise business niche.
Today we have different categories of franchising niches, and before you choose what franchise business to start, it would be wise to find out what is your ideal industry.
To succeed in any business, the entrepreneur must have a passion and high motivation for everyday work tasks that every owner must do. Usually, a significant percentage of potential franchisees immediately look for the top-rated franchisors according to some list that someone has presented to them.
The best solution would be to start a franchise business in an industry that is familiar to you, and you have an interest in it. So if you never wished to start a business in, for example, the fast-food industry, then doesn’t search in that direction.
You all know in what area you are good at, so choose an industry where you can add value to your future customers!
Today it is possible to start even an online franchised business so if you are tech-savvy, go in that direction. If you want to sell ice cream, go for it; if you’re going to start some outdoor or any other business, franchising opportunities in that direction are waiting for you to pick them.
There are countless franchising opportunities in every niche of business, so listen to intuition and start a franchise in an industry where you know that your motivation will be high.
2. Find out how much capital/investment fund do you have at disposal
When you pick the industry in which you will start a franchise, you must see how much you own in Liquid Assets and how much loan you can get from the bank. Starting a franchise is not cheap; you will be searching for a franchisor according to your financial abilities at the present moment.
Starting an independent business is much cheaper than starting a franchise, which means you will need to have at least $50,000 of savings (Liquid Assets). Most franchising companies have financial requirements that every franchisee applicant must meet.
So if you apply for starting a franchise that costs way over your financial abilities, your application will be immediately declined by the franchisor. But if you have, let’s say, $50,000 in liquid assets at your disposal, there are on the market many low-cost franchise opportunities that can deliver excellent profit.
So when we talk about what franchise business to start, you must be aware that the most popular/well-known brand franchises cost a few million dollars!
If you have a limited budget, you will need to search for franchising opportunities that can’t be seen on the commercials at the halftime of the final Super Bowl match. But this doesn’t mean that you can’t make more profit by owning a franchise from a franchisor who is not so ”attractive” at first glance.
Franchising is not only McDonald’s, Subway, Burger King, etc. If you want to have a profitable franchised business, your first task is to dive deep and research every franchising opportunity in your preferred niche of business; only in that way can you find the right one for you.
3. Make a list of the franchising opportunities in your desired niche.
Now that you know how much you can invest in an opening franchise business is time to make a list of the potential franchisors.
At present, there are a lot of websites that showcase franchising opportunities, so it will be easy to find out which franchisors operate in your preferred niche of business.
As we mention above, there are more than 4000 franchising companies, so your list of franchising opportunities will be very long.
Many companies that you will find in your research will be ones you have never heard about them before. Usually, these ”smaller” franchisors offer better opportunities for the investors. So please put in your list all companies, no matter how small it seems at first.
How to find franchising opportunities
Write in the internet search engine ” franchise opportunities” and click on some of the franchise directories in the first few positions. Use only websites that offer options to filter results by industry.
Usually, an evaluation about estimated starting cost will be available, so put on your list only those franchising opportunities for which you have enough capital.
Don’t search for ”top 500 franchises” or any other similar terms. You must be aware that many websites have connections with franchising companies, which means that they get money for promoting them.
4. Evaluate franchising offers
When you have a list of franchising opportunities in your preferred industry, it is time to evaluate how profitable they can be for you as a franchisee.
This research about how good is franchising opportunity will not be easy; you will need a lot of time and patience. This type of business is like marriage; by signing a Franchise Agreement, you and the franchisor must work together every day for the same goals, so you must not hurry before making a final decision.
You can evaluate franchising opportunities yourself or hire a franchise advisor to help you with what franchise business to start. In both cases, you will need to find the Franchise Disclosure Document of each company that interests you.
Some websites charge from 50$ to $200 to download Franchise Disclosure Documents, so don’t fall into the trap. These documents are free and can be found online very quickly.
Find out where to download Franchise Disclosure Document for free and learn how to read this document to get better insight into how good franchising opportunity is.
If you don’t have time or will to learn a little more about this industry, you can hire a franchising advisor to help you decide what franchise business to start.
However, you will need to find a reliable franchise advisor that will give you a real insight into each franchisor’s offer. Some franchising companies pay consultants to promote their offer, so you must be careful!
So before hiring a franchise advisor, read his reviews from former clients and contact some of them; you must be secure that you choose the right and trustworthy franchise advisor.
What Franchise Makes The Most Money
The most money makes franchises related to the Senior Health Care Industry and those related to the Cleaning Industry.
Many entrepreneurs, when they brainstorm ideas about what franchise business to start, the first thought is to open some fast-food franchised restaurants. However, investors must be aware that restaurant franchises are usually at the bottom of the franchising industry in terms of the profit margin that owners can expect.
Yes, the fast-food niche has a few exceptions; the most significant example is Taco Bell. These Mexican food franchised restaurants can deliver to the owner $160,000 profit per year, but its starting cost is high, and because of that, Return on Investment can be very long.
We recommend that all aspiring business owners that want to start a franchise first look in the direction of the Cleaning & Maintainance Industry. These franchises have a relatively low starting cost, and they make excellent profit margins for their owners.
Also, the pressure washing franchises are great earners. Renew Crew is one of those franchising companies that can be a good choice for rookie entrepreneurs who don’t know what franchise business to start.
Renew Crew franchisees can expect to make a 30% of profit margin, and because of that, this is one of the best franchising opportunities by our estimation. Also, the pressure washing industry is one of the fastest-growing in the last few years, which means demand is bigger than supply.
We have outlined a few steps that must pass all investors before choosing what franchise business to start. Selecting the ideal franchisor can be tricky because every franchising opportunity has advantages and disadvantages.
As a business concept, franchising has its risks, but if investors find an excellent franchisor, this type of business can bring a high and secure profit in many years upfront.
The most important thing is that you don’t hurry; finding the ideal franchise to start can take a lot of time. So be patient, do your research in the right, and consult with more experienced people in this type of business.