Investing in the Future – Hot Franchise Picks
The International Franchise Association reports that a new franchise outlet opens somewhere in the United States every eight minutes.
Franchises are hotter than ever. From recent graduates to displaced workers to retirees, more and more people are considering franchise opportunities as a means to financial security. It’s an attractive option for would-be business owners who want the added security of a proven concept. Small Business Administration data shows that, while the vast majority of businesses fail within five years, 80 percent of all franchise operations successfully reach the five-year benchmark.
Franchise businesses now make up $1 trillion in U.S. direct economic output, according to an International Franchise Association study sponsored by the Small Business Administration.
But who can afford to buy a franchise? Recurring rounds of buyout offers have automotive industry employees wondering just how far their buyout check could take them. According to Mark Corey, a Franchise Placement Specialist at FranNet, franchises come in variety of price ranges. They can be as small as a home-based service business, or as large as a full-service restaurant. Total investment can be as low as $50,000.
How do you decide if buying a franchise is right for you and how do you choose which franchise to purchase?
Paul Bensman, President of business consulting firm Details In Retail, Inc. offers these tips:
- Get expert advice – Work with an experienced Franchise Placement Specialist who stays on top of the latest trends and concepts. Choose one that offers no-fee consulting to buyers.
- Partner up! – If you don’t have enough to buy a franchise on your own, form an investment group and buy a share. This expands your options.
- Focus on the hot trends and franchises that are not oversaturated in your area.
Bensman’s picks for franchises to watch:
Hot! - Food concepts with a low price point:
1. Sonic is my number one pick with a diverse menu covering breakfast, lunch, dinner, snacks and deserts. They also service the fast-growing coffee segment.
2. Dunkin Donuts is well positioned in the coffee race – priced right, and offering donuts to eat with that coffee. They recently added several food items at great price points. Not trendy, but this concept will last a lifetime and makes a great concept for long term investing.
3. Taco Bell, yes make a run for the Border! Taco Bell’s price points make it a real winner in a down economy and they continue to drive traffic with their great marketing campaigns.
Hot! - The service sector:
1. Massage franchises: These franchises offer reasonable fixed opening costs and are based on memberships; somewhat like a health club. Today, people need a place to relax, especially in this stressful economy.
Three concepts to explore:
• Massage Envy
• Hand and Stone
• Massage Heights
2. Pet Daycare: Very fast growing! Lots of options.
Not! – Ebay Storefronts
These could become the shortest living franchise category in the history of franchising. Don’t waste your money.
Bensman’s golden rules for franchise buyers:
Many franchise companies sell out entire markets relatively fast. It’s important to keep your eye on new franchises that pop up and act quickly when you find the investment that’s right for you.
Whenever and wherever you do business, the most important question to ask yourself: “Is there a need in the marketplace?”
Recent Comments