We receive 2-3 comments on the channel daily asking if a specific franchise is the “best”. This video answers that question!
A while back we did a video on what franchises we all own here at Franchise City. Every one of us, we all own different franchises. Not one of us has owned or owns the same franchise. Why? Because if you want to make the most money, you need to do one thing that everyone neglects to do. That one thing is to calibrate the franchise specifically to your situation. And there are three main points to consider:
Operator capabilities and preferences,
Long term industry outlook,
Local market demand and demographics.
Have you considered all of those? If not you are just guessing. Most people just buy a franchise because they like the Tacos or something equally silly. They speak to one company, have no idea how much other franchises make comparatively, do almost no research, and wonder why their franchise struggles or fails. And thousands every year do fail, we cover that in the book “The Dark Side of Franchising” available on Amazon for $2.97 or download free on the 15th of every month.
Every franchise does well in some regions, not so good in others. That is your demographic alignment, and market demand research. Every franchise has different operational requirements – what you have to do day to day, to make the business succeed. That might be B2B sales, it could be relationship building, it could be local networking, it could be hiring, or operations. Some businesses have high pressure, some low pressure. Keep in mind most franchises core business model has nothing to do with the service, like painting or cleaning, and everything to do with building a business. Just because you know how to cook doesn’t mean you would be a good McDonalds owner. Just because you know how to clean, doesn’t mean you would be a good cleaning franchise owner. You hire that job. Also, every franchise has operators at the top and franchisees at the bottom who are struggling. You will never know which one you will be until you align your own operator capabilities. And you dont want to find that out after you invested! (We have a free tool at franchise city that actually predicts future performance in a hypothetical business environment)
You want a franchise where your profile matches the people at the top, not at the bottom. Is this the best franchise? For the people at the top its great! at the bottom not so much, and every franchise, every single one, has people who struggle and people who are very successful. Is that the best franchise? Depends who you are and where you live.
Remember when we discussed the most profitable franchise earning 28 million a year? That same franchise has people that failed. Its al about operator capabilities. I can’t tell you if a franchise is the best, or even if it’s bad or good until I know more about you and your situation. In the franchise videos where we say “Top 5 reasons NOT to buy” …..all that information is true, but in those systems they also have operators that are happy and doing well!
And finally long term industry outlook. You can find comprehensive industry reports online at companies like bisworld. These cost abut $1000 and are worth every penny. (This is another free item I provide to people who are work with me here at Franchise City) and this reports outlines a given industries strengths, weaknesses, opportunities and more. If the industry you are exploring is facing headwinds, it can make sense to consider other options.
In addition to aligning your skills, local demand and long term industry outlook there are multiple sub categories that need to be considered. Exit strategy, do you want to ultimately sell the business for a profit or operate it long term? Certain businesses, usually those with recurring revenue, are better options for resale. Do you want to work really hard and make a lot of money or do you want a passive franchise and do no work at all? Do you want a semi passive business where you keep your job and spend maybe 10-15 hours a week on the business? What is the local competitive landscape? Who will you be competing against in the area and do you have a market differentiator to outsell them. Only when you take the time, and this takes a while to connect the dots, then you are far more likely to one of the franchisees at the top, not the bottom who is just guessing.
Wouldn’t it be great if there was a free service that could help you determine all these factors and find the best franchise for your situation? Franchise City broker group does exactly that and costs you nothing, its “A Better Way to Buy a Franchise” https://www.franchise.city/our-services