A franchise is a business, in which an entrepreneur can operate an individual location using the rights to a bigger company’s logo, name, and products. The franchisee is the operator and third-party owner of the location, while the franchiser owns the bigger company. To run a franchise, the franchisee buys the rights from the franchiser.
Many entrepreneurs and investors are thinking about investing in franchise opportunities in 2020. How can you decide which are the best franchise opportunities for your requirements? The right answer for you depends on your preference, skills, and budget. In this article, we’ve compiled several franchise opportunities that we believe to be most lucrative across the board.
The fast-food giant started franchising back in 1964. Currently, it ranks second on Entrepreneur’s Franchise 500, mainly due to its consistent and rapid growth. In the third fiscal quarter of 2019, the fast-food company projected an overall sales increase of 8%. One year earlier, fast food sales had grown by 6% to $11 billion.
In recent years, Taco Bell franchise ownership has rapidly grown due to its convenience. Currently, it boasts almost 5,000 delivery locations across the U.S. and a POS system with direct Grubhub app integration.
McDonald’s started franchising early – in 1955. The fast-food chain has more than 38,000 units in place, and there is no end to growth in sight. To sustain this trend, the company is betting on platforms and tech solutions that can optimize service speed. As if it could get any faster than this – McDonald’s restaurants are currently filling 10 orders per second.
UPS started franchising in 1980 and currently has 5,166 units across the U.S. Similar to the examples of Taco Bell and McDonalds, purchasing this franchise is a big investment. However, it is still the lowest-priced option on the Franchise 500 top ten. The company is focused on returns, unlike most other top franchises, which are focused on slow and steady growth.
According to Tim Davis, President of the UPS Store, buyers return about a third of online purchases. Therefore, this has become a very appealing business segment for the UPS Store, a retrospective entity. In addition, the company has signed agreements with a number of major retailers to serve as their official return courier.
In related news, the UPS Store is considering a new business concept, which is reflected in the offices’ color scheme. They have recently added yellow, white, and blue to their customary brown palette.
Planet Fitness is one of the newer entries on our list in terms of when they began franchising in 2003. Currently, the company has just under 2,000 total units nationwide. Chris Rondeau, CEO of Planet Fitness, has talked about how “leanly” the fitness franchise is being run, with stores being operated by just 15 staff members. Moreover, there are no fitness classes or swimming pools, and no instructor salaries to pay. For these and other reasons, Planet Fitness can afford to charge its customers only $10 a month for basic membership. Over the past five years, Planet Fitness memberships have skyrocketed from 7 million to almost 15 million.
This casual, privately owned and operated fast-food franchise has become famous for its hearty, nourishing fare. These include “butter burgers,” chicken, fish, cheese curds, and frozen custard. The menu also features traditional Midwestern cuisine, since Culver’s is most active in this region.
It is important to note that candidate franchisees are asked to collect trash in the parking lot and scrub floors. The idea behind this recruiting tactic is that no one should feel “above” doing dirty work. The franchise has been experiencing a period of significant growth, with nearly 200 new franchisees beginning operations last year.
Things to Consider if You Go for Franchising
You need to take costs and fees, support, growth and size, financial stability, and brand strength into account. Such costs and fees include the total investment, royalty fees, and the franchise fee. These numbers change often, which is why we haven’t reported them here.
If you are considering buying a franchise, you will need to determine its earning potential. Moreover, you will need to determine whether the proposed business model has the potential to become successful. Finally, you will also need to research the legal aspects of owning a franchise.