Looking to run your own business? You’re not alone. The problem for many people is that it’s difficult to come up with a great idea, product or service. For others, it’s the lack of experience or know-how which holds them back.
If any of these sound like you, then opening a franchise might be the way forward so you can get the best of both worlds. The great thing about opening a franchise is there are so many out there so you can find one you’re truly passionate about.
In this guide, we’ll cover:
- How does a franchise work?
- Is buying a franchise a good investment?
- How to evaluate a franchise opportunity
- Best franchises to buy and own in 2022
How does a franchise work?
Starting a franchise can be a great way to get your business up and running quickly and with minimal hassle. But how do franchises work, exactly?
Basically, a franchise is a type of license that allows someone to use a company’s trademark, name, and business model to open and operate their own business. The franchisor (the company granting the license) provides guidance and support to help the franchisee get started and be successful.
In most cases, the franchise fee gives the franchisee the right to use the franchisor’s brand and business model for a set period of time. The franchisor also typically provides training, marketing support, and access to proprietary products or services.
So if you’re thinking about starting your own business, a franchise could be a great option. But it’s important to do your research and make sure you’re ready to make the commitment before you take the plunge.
Is buying a franchise a good investment?
It certainly can be! Some of the main benefits are:
- Owning a franchise gives you the ability to own your own business while also being part of a larger company.
- Franchises often have lower start-up costs than traditional businesses, and they also come with proven systems and processes in place. This can give you a big advantage when starting out, and it can help you avoid some of the common mistakes that new business owners make.
Franchises also offer ongoing support from the franchisor, which can be invaluable as you grow your business.
How to evaluate a franchise opportunity
If you’re serious about investing in a franchise…great! But first, there’s a lot to consider. Here are some of the most important:
- Franchise fee – this is the norm. If you want to open a franchise business, you’ll need to pay an upfront, one-time fee that can range from thousands up to hundreds of thousands of dollars.
- Profitability – you’ll want to if the business is worth the money and whether you’ll make a return on your investment. Unit growth, franchisee success rate, and the business’s financial performance should all give you a strong indicator.
- Personal finances – some franchises required owners to have a minimum net worth to be eligible. Others have liquidity requirements. You’ll also need to factor in how much money you’ll be investing on an ongoing basis.
Best franchises to buy and own in 2022
All of the franchises listed below have been featured in Entrepreneur’s 2022 Top New & Emerging Franchises Ranking. We’re not ranking them in any particular order.
1. Pinspiration
Franchise fee: $33,000
Initial investment: $109,000 to $228,000
Three-year growth rate: 1,350%
Total franchise units: 29
If you’re looking for a great, fast-growing franchise to get involved with and have a passion for all things creative, then Pinspiration could be the perfect match!
Pinspiraton is a DIY arts and crafts studio that’s dedicated to helping people accomplish their artistic goals, one canvas at a time.
Founded in 2015 by Brooke Roe, it was inspired by craft-based websites like Pinterest. Brooke wanted to offer communities a studio with tools and art supplies so people could come together and unleash their inner artist in whichever way they choose.
With an ever-changing rota of monthly projects, party rooms, the famous Splatter Room, and even a bar, it’s a fantastic place to go with family, friends, or partners for a day you’ll never forget.
Since beginning to franchise in 2018, Pinspiration has opened over two dozen and is looking to expand further. Want to find out more? Apply today!
2. Pure Green
Franchise fee: $30,000
Initial investment: $122,950 to $380,400
Three-year growth rate: 450%
Total franchise units: 22
Pure Green is a nutrition company that provides high-quality cold-pressed juices and smoothies. They source nutrient-dense superfoods and turn them into healthy, tasty products.
Founded by Ross Franklin, a wellness entrepreneur, the company offers lots of different products with various superfoods as their main ingredients.
Pure Green began with a few brick-and-mortar retail shops in New York City. The company then expanded into an omnichannel business divided into a wholesale and franchise division. Pure Green is now one of the fastest-growing smoothie and cold-pressed juice companies in the United States.
3. Send Me a Trainer
Franchise fee: $34,999
Initial investment: $49,099 to $84,799
Three-year growth rate: 5,600%
Total franchise units: 57
Send Me a Trainer brings live, personal training right to your door through an app. For people who would prefer to exercise at home, Send Me a Trainer makes it possible to schedule a session with some of the best trainers.
Before the Send Me a Trainer brand was born, it was known as “Bounce Fitness,” a 2007 outfit that made in-home training a reality for customers. After realizing the high demand for the service, Send Me a Trainer was created as a fitness service accessible through a mobile app.
People love Send Me a Trainer because it’s a personal service that provides fitness classes and training at their convenience.
4. CPA Moms
Franchise fee: $35,000 to $45,000
Initial investment: $39,590 to $57,500
Two-year growth rate: 600%
Total franchise units: 7
CPA Moms is an accounting firm that provides a wide range of financial services to entrepreneurs and small business around the US.
Founded just two years ago, CPA Moms is already growing fast with seven franchises having been opened in that period. An accountant by trade, founder Mayumi Young has combined her education with her passion for small businesses by setting up CPA Moms.
5. Crave Hot Dogs & BBQ
Franchise fee: $25,000 to $45,000
Initial investment: $161,300 to $797,500
Three-year growth rate: 200%
Total franchise units: 12
Love hotdogs? Then this could be the one for you! As the second most popular food in the US, and with 20 billion consumed every year, you know you won’t go wrong with investment in a hotdog franchise.
Founded in 2018, it’s been a hit with consumers ever since. It’s not just hotdogs though. From smoked brisket, pulled chicken and pork, diners can get everything they crave. What’s more is there are opportunities to diversify in terms of the food offered.
Crave offer two ways to invest: in a brick and mortar store, or in a food truck. And there will be multiple training courses so you can learn the basics of running a business and the back end of operations and reporting.
6. Koala Insulation
Franchise fee: $49,500
Initial investment: $147,813 to $190,138
Three-year growth rate: 21,200%
Total franchise units: 213
Voted #1 in Entrepreneur’s 2022 Top New & Emerging Franchises Ranking, Koala Insulation is an insulation contractor providing services to homeowners, contractors and property owners.
According to the Harvard Joint Center for Housing Studies, at least 26 million homeowners spend money on home improvements each year. And especially with a global energy crisis, families are becoming more conscious about wasting energy due to under-insulation.
Koala provide every type of insulation to improve energy efficiency with competitive prices and evaluations. So o if you’re looking for a solid model with lots more growth potential, this could be the one!
The bottom line
Yes, starting your own business can feel like a scary step into the unknown. But if you plan well, do enough research, and find the right opportunity, it can prove to be a more affordable entry point for aspiring entrepreneurs. Plus many franchisors offer financing models these days, so always make sure to enquire.