This story has been updated from May 24, 2014 to include Fitness Revolution.
NEW YORK (TheStreet) - Franchising. Whether you know it or not, you see it everywhere. From McDonald's
(MCD) to 7-Eleven, there are many companies that use franchising as their business model.
Franchise investing provides, in many cases, a proven model of business that first-time owners can rely upon. Besides a franchisee playbook, parent companies also offer ongoing support and assistance in the form of marketing, technical help and sourcing, for instance. That said, some of the best franchises aren't the most well-known or even the sexiest of concepts. But then again, investors should not be buying into a concept based on brand name or concept idea alone. It's about profitability, and in most cases, working at a job a franchisee has deep passion for that shows in the business they run.
To decipher what some of the best franchises are, TheStreet worked with Franchise Business Review, a franchise market research company to come up with the list. The list below represents franchise names that scored the highest in Franchise Business Review's annual franchisee satisfaction survey that polled more than 400 companies. The survey represents the top 200 brands.
FBR says that any franchise company with 10 or more operating franchisees is welcome to take the survey, which is free. Companies looking for operational performance typically purchase results specific to their brands.
"The silver lining of the recession is that many franchisors are focused on operations and are really looking at how we can clean up our operations," says Eric Stites, CEO of Franchise Business Review
. "Franchises have really done a good job refining their concepts, trying to bring down that initial investment, reducing requirements. If it's a retail location, more franchises are going to a smaller more efficient location. They really are looking at the unit economics and that goes hand and hand with the recession."
Stites says greater transparency, thanks to both the recession and the age of digital data collecting, is also another growing trend. Potential investors should ask brands they are interested in if they have a third-party franchisee satisfaction report available for review. "If they don't have one ask them why," he noted. "That potentially means they're hiding something."
There are lots of market research firms that looks to provide lists of the "best franchises," and while these lists are a good stepping stone for potential franchisees to use, it's ultimately up to investors to do their homework.
Here are nine franchise brands worth considering.