Price Points, Location and Franchisor Support Make All the Difference in Finding Your Ideal Franchise

Franchise ownership is a tried and true pathway to business success, offering aspiring entrepreneurs from all backgrounds the chance to operate under a proven model and established brand name. And the numbers tell a compelling story. According to the IFA 2024 Franchising Economic Outlook report, which is produced by FRANdata, the total franchise output is expected to rise by 4.1%, from $858.5 billion in 2023 to $893.9 billion in 2024. 

However, not all franchise opportunities are created equal. Franchise ownership is a multifaceted endeavor that is influenced by many factors. 

So how do you decide which franchise is right for you? Whether you're passionate about fitness, love the buzz of fast food, or see potential in home services, understanding the key factors behind each option is crucial.

Here, we explore five aspects of franchise ownership that vary among brands and industries. 

1. Price Point

Price point is an important consideration before investing in a franchise business. Franchise opportunities span a wide financial spectrum, from low-cost options to high-end investments. The misconception that all franchises require a substantial initial investment can deter potential entrepreneurs. However, the beauty of franchise ownership lies in its accessibility to a range of financial circumstances.

• Low-Cost Franchises: (Under $100,000)
  Common industries: Mobile food, home-based services, consulting services, travel planning and commercial cleaning are common for this investment level.
  What you need to know: Since these businesses can be run from home or a mobile unit, there are likely no buildout costs and minimal employee requirements. This lowers overhead costs. 
• Mid-Range Franchises: ($100,000 to $600,000)
  Common Industries: You can expect a moderate investment range in fast-food, home services and boutique fitness.
  What you need to know: Many of these businesses require storefronts and equipment to operate efficiently, and several employees need to handle and maintain the equipment. Staffing and inventory management are key to running these businesses.
• High-End Franchises: ($600,000 to $3 Million)
  Common industries: Children’s day care centers, large-scale fitness gyms and hotels.
  What you need to know: Many franchises in this category require expensive equipment, large leases and many employees. This means that it will also take a longer time to open the business.  

2. Location

As the saying goes, success in business is all about location, location, location. Location can make or break a business. Prospective franchise owners must consider not only the geographic location but also the specific site within that area.

For example, different franchise types thrive in certain geographical locations. For example, an ice cream shop would do well in a coastal Florida town. But that same business may struggle in a Northern suburban area. Climate, demographics and local preferences all impact the viability of your franchise. Conducting thorough market research is important when identifying the most suitable location for your business. Factors such as foot traffic, proximity to competitors and accessibility are also important to consider. 

3. Emerging vs. Established Brands

Before investing in a franchise business, it’s important to decide whether you prefer working with an established or emerging brand. With an emerging brand, you have the opportunity to grow alongside the business and be one of the first to get in on the ground floor of an exciting new venture. However, the risks are higher, as the brand's reputation and profitability may not be proven, meaning you may need to focus heavily on building local brand awareness.

In contrast, established brands have a proven track record, strong name recognition and an established customer base. But the upfront costs may be higher, and franchisees may have less creative freedom and fewer opportunities in prime territories. However, you will likely have greater access to the founder and upper management of a newer brand. 

4. Franchisor Support

Your experience as a franchisee can vary depending on the level of support provided by the franchisor. When evaluating brands, look for those with:

• Comprehensive Training Programs: Franchisors provide training programs that cover everything from operations and marketing to customer service. Brands that prioritize ongoing training and education will increase your likelihood of long-term success. 
• Marketing and Branding Support: Effective marketing and branding are essential for attracting customers. Look for franchisors that offer top-notch marketing materials, advertising guidance and access to national or regional campaigns. This support ensures your business shines both locally and nationally.
• Operational Assistance: Day-to-day challenges are much easier to tackle with a franchisor that offers hands-on operational support. From inventory management to tech solutions and staffing assistance, comprehensive support helps you run your business smoothly and efficiently.

5. Dedication to the Business

One of the greatest perks of franchise ownership is the flexibility it offers. Want to keep your day job but still have a business of your own? Absentee or semi-absentee ownership could be for you. Looking to be more involved? Owner/operators have a full-time, hands-on role. Depending on the franchise, part-time and seasonal options are available in some brands.

If you're eyeing growth, many franchises offer the chance to own multiple locations or territories. Newer brands just getting off the ground may offer the excitement of starting with a single location as they expand. Looking to save on costs? Home-based or mobile franchises are excellent options for avoiding build-out expenses while keeping flexible hours. 

Franchise Ownership: Not a One-Size-Fits-All Model

As you can see, franchise ownership is all about finding what’s best for you. With so many options, you have the opportunity to tailor your franchise journey to your personal goals. By carefully considering your options, you can discover the perfect fit that aligns with your vision. Franchising offers a rewarding path that not only allows you to support yourself and your family but also helps build lasting wealth for future generations.

An important aspect of the discovery process is working with a franchise consultant. This franchise professional assists prospects from beginning to end and acts as a matchmaker for franchisors and franchise business owners.