Today, most of the attention is being paid to franchise rankings. There is The Franchise 500 list of franchises or The Top 200 at Franchise Business Review or Top 500 at Franchise Times. Almost everyone has a Top 100 or Best Franchises to Own category. Top franchises might include Taco Bell, Jersey Mike’s Subs, Chick-fil-A, Dunkin’ Donuts, or McDonald’s just to name a few. These are household franchise brands that most of America is familiar with. Small business franchises don’t fall into this category but there is success to be made with small business franchises. Let’s explore some of your options.
Truth is, while there are more than 3,500 franchise companies and more than 750,000 franchise establishments across America, very few franchise companies have in excess of 100 franchise units. McDonald’s likely leads the pack with 36,000 units, followed by 7-Eleven, Burger King and Taco Bell but the numbers change almost everyday so it’s hard to say who is number 1. Most people outside of the franchise industry, can’t name the top 10 franchises.
Find a Small Business Franchise with Potential
Finding a franchise that has all the success characteristics of a top franchise brand is not that easy. Most people don’t know where to start or what to look for. Know that, today, small franchises have learned a great deal from the Dunkin’ Donuts of the world. There are some viable prospects.
Where Do You Start?
Often times people look to their past in an attempt to do something they know best. If you love what you do day to day and you have a passion for it, then, yes, you may want to give that industry some thought. It’s more than just having the skill set. You have to have a passion for your business to make it a great success.
Popular Small Business Franchises 2023
1. Food Franchises – small business coffee franchises like BIGGBY Coffee or PJ’s Coffee of New Orleans are a good match. Frios Gourmet Pops is a low cost small business franchise you can turn into your side hustle.
2. Service based Franchises – low cost and often homebased and scalable. Take a look at The Inspection Boys or HomeTeam Inspection. Work from home and own the ultimate leather repair franchise. Creative Colors is an excellent small business franchise.
3. Child-related Franchises – if you love kids and being around kids everyday, they’re a many franchise models to fit any budget. Home based, children’s franchises would include Soccer Stars, Tutoring Works, Nutty Scientists or, if you’re into basketball development for youth, try M14 HOOPS.
What to Look For?
Most top franchise brands have a proven business model. Operating systems, Marketing programs are all proven. Initially, they all started with a business plan and in most cases that plan has been revised multiples of times. What they thought would work, failed. Or, what they thought would be popular was not. It takes time to find the right product, a niche service or a tried and true method or operating system that sets your company apart from the rest. McDonald’s wasn’t perfect in the beginning and franchise concepts like Chick-fil-A didn’t always have lines of cars waiting to order food. They made their mistakes.
Look for a small business franchises that has watched the household brands development over years and implemented some of their practices into their own small franchise brand.
When you’re validating a small business franchise, look to the current franchise owners for the best feedback. You cannot take this lightly. You’ve got to find a way to establish a relationship with as many current franchise owners as you can. Ease into the hardest questions with a softer approach. Be patient and respectful of their time and their paranoia. Not everyone likes people asking about their business and their finances.
Low Turn-over rate
The best franchises have the smallest amount of turnover. Franchisees leaving the system for a variety of reasons is a red flag. You’ll find this information in Item 20 of the Franchise Disclosure Document, (FDD). If you can find a franchise system with a product or service you have a passion for, happy franchisees, good locations available where you live and a turn over ratio of less than 5%, then give it a good hard look.
Let’s face it if you’re partnered with Warren Buffet, you’ve got a pretty good chance to succeed. Take a deep look at the backgrounds of the CEO, CFO, and top management of any franchise system you are considering. Do they have a history of success in franchising? Is this their first go around with a franchise business? If so, it doesn’t mean they won’t be a wild success but it does add to the risk you’re taking.
At Discovery Day, sit down with those people you’re going to be dealing with every day. Make sure you like them and can communicate with them in a meaningful way. They will be the life blood of your business. Build a relationship right now with the guy that helps you get what you need for your business. If you can’t get along with this guy, do not move forward with this concept. You’ll find another.
Unique Product Or Service
You have got to affiliate with a franchise company that has a product or service that sets them apart from everybody else. It might be a better hamburger or home made ice cream that people will drive across town to get. It might be a quality window covering or blind that can be installed in a week at a 50% discount to the competition. Whatever it is, it must be unique to have sustainability. Don’t take this lightly.
You can find franchise success in a small package. Know yourself, know your community and your target market. Find a management team you have confidence in and you truly like. Be proud of the product or service you are selling and have a passion for what you’re about to do. Get busy being your own boss today!