The answer to this question is easy. The most profitable franchise is the one that is making you lots of money, right? The question is, how do you get there from here?
If running a profitable franchise were easy, everyone would do it. The fact is, there’s a lot that goes into owning a franchise.
Owning a profitable franchise comes down to a series of key factors:
Let’s look at the above in a little more detail.
We’ve talked about having a passion for your business before. But it’s such an important factor, it bears repeating. What’s your passion? What gets you out of bed in the morning? How competitive are you? How driven are you to succeed?
Let’s face it, no business has a hope of being profitable if you as the owner are not passionate about driving it forward. Franchises are a different model than startup businesses, obviously, but that doesn’t mean they don’t require a hell of a lot of work. Your staff and your community are relying on you to deliver. Are you up to the challenge?
We’ve all heard that franchising has a lot to do with real estate. Location is a big part of a successful franchise. If you set up shop in a location where there are no clear sightlines and no demand, then you’re in trouble. Location is arguably the most important factor out of the gate because positioning and visibility are crucial for developing awareness in your community. In other words, people gotta know you exist.
This is just a fancy way of saying: people.
It may be tempting to invest in a franchise based solely on the fact that people can see it. Unfortunately if you’re not considering your community, visibility alone won’t be enough.
Do you get excited about the prospect of running your own team? Building a successful team is a big part of owning a franchise. If you’re not invested in the business as a leader, both monetarily, and with your heart and soul, then it may be more challenging for your team to gel. It’s not easy, but building, leading and nurturing a team can be extremely fulfilling and rewarding.
Some questions to ask when assembling a team for your franchise:
We recently did a survey where we asked the strongest deciding factor for purchasing a franchise business. Respondents selected “location” as the first factor, the second was “Brand Power”.
COVID-19 has changed things for people in that it has increased their desire to return to a sense of normalcy and familiarity. A strong, recognized brand can make people feel a sense of security.
Some established franchises have been operating in Canada for over sixty years. That’s a long legacy to uphold. You can’t expect to have a profitable franchise based on name alone, but brand perception is definitely an important part of the mix when it comes to consumer confidence.
Yes, of course, cost will always be a factor. The cash outlay on the front end is often a barrier for many folks to start a franchise. You need to determine what your comfort level is with what you have, and what you will be willing to invest to get the business off the ground.
Naturally, the costs vary from franchise to franchise. Usually, the more recognition an established brand has, the more they can expect to charge for the initial investment as well as for ongoing franchise fees. Often, this is reasonable for the franchisee, given that much of the heavy lifting (business concept, promotion, marketing, business model, tools and resources) are already provided for them.
Finding the initial investment amount that is right for you will come down to weighing out a combination of several factors.
In the end, the most profitable franchise to own is the one that delivers the right mix of all of the above. There is no magic bullet here. However if you have a firm handle on the factors listed in this article, your chances of having a successful and profitable franchise will increase drastically.
As always, we are here to help if you have questions you want to send our way.
Despite the massive challenges that the restaurant community is currently facing, the Recipe Franchising Team would like to extend our message of reassurance. Having been in business for over 137 years, we are confident we can get through this challenging time just like many others in the past. We take pride and ownership in the well being, health and safety of our franchisees, associates and customers. Recipe Franchising is looking towards the future with hope and continuous growth. With the challenges at hand, The Recipe Franchising Team has adopted a new process that we like to call "Frictionless Franchising", a way for you to meet, research, investigate and explore new franchising opportunities with us from the comfort of your home. We want to make sure that we are always here to answer your questions, inquiries, and help anyway we can. Please do not hesitate to contact us.
Stay healthy and stay safe.
The Recipe Franchising Team