Often when craving for something real quick, you make a pit stop and purchase your coffee or snacks from some known brand that you have visited before in some other city. In all likelihood, you are visiting a franchise shop, for example – McDonald’s, Subway or, Dunkin’ Donuts.
When an entrepreneur takes up the logo, business name and, products of a big brand to operate in their own local space, that independent entrepreneur takes up the franchise. A franchisee is a third-party business owner whose license to conduct their business is sold by the brand owner.
This blog-post aims to explain the best brands to own up the franchise for better returns and the franchises that have performed exceptionally well over the years.
1. McDonald’s –
A global leader in the fast-food industry, which has name and recognition in almost every city – metropolis or tier 3 – McDonalds would surely provide higher returns on your investments. The higher returns require a hefty initial investment, as well. Initially, one needs around 10-20 crores to open and set up a McDonald’s outlet. The franchise owners also demand franchise fees of 30 lakhs. The space required to open a store of McDonald’s is in the range of 1000-1500 square feet.
2. Subway –
Another big name in the food industry with sandwiches that are delectable and craved is Subway. It is an excellent opportunity to invest in. The consumer base is highly niche and looks out for any hunger calling to grab a bite from the Subway store. To open a Subway store, one needs to invest in 55-80 lakhs initially. The space required to set up the store must be greater than 600 square feet. The owners seek a 6 percent royalty on the net revenue made.
3. Sport clips –
With around 95.4 percent continuity rate of stores, i.e., of the number of stores opened in the previous five years, 95.4 percent are up and running with greater returns and higher stability. The owners credit their constant monitoring of franchises, low startup costs, and a support system provided by the company owners because of the smooth functioning of stores. The initial investment required to open a store is 1.5 to 3 crores, and the owners need a franchise fee of 45 lakhs.
4. Jazzercise –
Imagine jazz, coupled with your daily exercise routine – the freedom and the constraints of the body expressed in jazz. Jazzercise is the exercise business, a low-cost investment franchise that attracts many visitors and health freaks due to its ambiance to themed-gym-goers. The initial investment required to own a franchise of Jazzercise is two lakhs to 25 lakhs. The wide range that it offers is to open a different kind of outlets with the locale audience’s customized requirements, which fits your budget pocket. The owners require a franchisee fee of 1 lakhs.
5. LifeCare –
Health is one of the prime factors of concern for any individual. Lifecare is one of the leading pathologies operating with a crust that crystallizes with every new report that they deliver with precision and utmost care and have thus gained the reputation to the point of being infallible. To open a medical pathology lab would be wise, as it would reap significant returns on the investment made. Initial investments required to open the Lifecare lab are in the range of 1-1.5 crores, and space should be more than 2000 square feet.
6. Dream Vacations –
A home-based travel agency that does not require a considerable investment cost is the best option to own a franchise if you wonder about opening something to capture the traveler zeal in you and help fellow travelers. It’s a perfect fit for military and army veterans. The initial investment is in the range of 3 lakhs to 15 lakhs. The owners demand a franchise fee in the range of 50 thousand to 10 lakhs.
To invest in a franchise, one needs to be sure about the business’s profitability, and the ones listed above see more considerable growth in their areas or fields. There is no one formula to judge the success rate of a franchise, but few bullet points that are considered to measure the performance of franchises are –
- Unit growth – Checks the number of units of the brand’s outlets or stores that have grown in recent times. The greater the number of branches opened, the larger is the chance of expanding growth or a successful franchise.
- Success rates of new franchises – It can be measured by the data collected of the franchises that are up and running of all the stores that are in business. These listed businesses have franchises that are up and running for years.
- Financial statements – Before taking up the franchise, please ask for the FDD (franchise disclosure document) and the average sale per unit to the franchisor.