Franchises thrive for a reason.
The model, particularly successful with restaurants, creates a ready-made template for attracting business. The company has tested its model, worked on its branding and polished a product that (ideally) has an existing base of loyal customers ready to come in the door. When someone opens a new Buffalo Wild Wings or McDonalds MCD , people already know what they're going to get.
With a successful franchise, people already know what they're going to get and want it.
This can make a franchise a great opportunity. It has many of the advantages of owning a business without needing you to come up with a product, plan and business model. There is an infrastructure to provide support and help you through the many pain points that can kill a small, independent business.
Of course, there are plenty of downsides too. Opening a franchise can be expensive. You often need tens- or hundreds of thousands of dollars in cash on hand. Buffalo Wild Wings, for example, requires that a candidate have at least $750,000 in cash and $1.5 million in assets before they'll approve a franchise. You're also stuck with the fortunes of the company at large. As the New York Times NYT extensively reported in the case of Subway, that alone can sometimes sink your entrepreneurial dreams.
All of this means that, if you want to open a franchise, it's essential to choose well. To help you with that process, here are eight examples of some of the best franchises you can buy depending on your own goals.
Best Franchises to Buy
Most Profitable Franchises
• Taco Bell
A Taco Bell franchise does not come cheap. Your initial investment can run anywhere from half a million dollars to more than $2.8 million depending on local costs and circumstances. The franchise fee alone costs $25,000 - $45,000.
But if you can afford to break out of the bun, the Tex-Mex fast-food chain offers some of the best returns in the industry. Taco Bells average $1.5 million in per-restaurant sales per year. While these are gross earnings, not net profits, that can add up fast.
According to the industry magazine QSR, Chick-Fil-A has more than $4 million in sales per restaurant per year. This makes it one of the most profitable franchises per-location by a wide margin. No other restaurant they studied came even close.
The catch is… you can't own your chicken empire. The company calls its locations franchises and charges a $10,000 franchise fee, but it keeps ownership of the restaurant. You are an operator, which largely means you act as the local manager. The company owns and controls the store, you just run it.
That doesn't mean this is a bad idea. We return to the numbers. At $4 million per restaurant, even becoming an operator is fiercely competitive.
Perhaps you'd rather wear a blazer than an apron. In that case, opening a real estate agency might be the right move for you.
One of the most recognizable real estate brands, Re/Max also is one of the most affordable franchises you can choose to open. Your initial fees can run between $17,500 at the low end to a high of $37,500 at most. By the time you've finished paying all expenses, your initial costs can be as low as $40,500 or as high as $280,000. This is a fraction of what most franchises cost to open, and makes this far more accessible than most.
• UPS Store
UPS Stores have a wide variety of footprints, so it makes sense that the costs to open one would range widely. According to the company's website, you can open a UPS UPS Store for as little as $10,000 or as much as $5 million. But expect to pay somewhere in the neighborhood of $150,000.
For a business well poised to profit off the death of retail and the explosion of shipping, that's not bad at all.
Most Durable Franchises
Could we make this list without the Golden Arches? McDonald's arguably invented the franchise business model.
Opening up one of these franchises isn't cheap. Astonishingly, the restaurant boasts so many locations given that it charges between $1 million and $2.2 million in fees and initial investment. However, once you're in, you will own a part of one of the most well-recognized and stable companies in the U.S. Choose your location wisely and you should do well.
Fun fact: Dunkin' DNKN no longer calls itself Dunkin' Donuts. They dropped the second part of their name but still kept the "DD" as their logo. Another fun fact? When it comes to coffee shops, they have more brand loyalty than Starbucks SBUX .
As with McDonald's, opening a Dunkin' isn't cheap. The fees and initial investment alone will run you between $100,000 to $1.6 million, according to the company's estimation, and that doesn't include buying or renting the real estate to operate in. That's a lot of doughnut holes and cups of coffee. Fortunately for you, the customers have announced that they aren't going anywhere.
How would you like to sling Slurpees? Don't laugh, there's great money to be made with a 7-11 franchise. It also is one of the easiest franchise opportunities out there.
The convenience store giant offers to build and stock the stores for its franchisees. The franchise fee costs $25,000 and you have to post an initial inventory down payment of between $20,000 - $40,000. However, once your first payments are made the company does the rest, handing you the key to your very own store. Don't break it.
• Baby Boot Camp
Opening a store or restaurant is great. It is the traditional franchise model. What's even easier, though, is starting a service-based business. These can offer a much smoother transition into owning your own business because they are ready to operate essentially as soon as your employees show up.
We're not suggesting that any business is easy to run, far from it. However, a business like Baby Boot Camp, which teaches fitness classes for new moms, has fewer moving parts than a restaurant or store. At about $12,000 to start, it's also perhaps the cheapest entry on this list.