5 Profitable Franchises for 2015
Searching for a franchise? As you consider becoming an entrepreneur, profitability definitely needs to be one of the criterion you explore deeply. It may seem obvious, but it turns out that often times, prospective franchisees simply follow their passion in lieu of actually considering the economics of franchise ownership.
For example, we met with a prospective franchisee recently who was completely obsessed with opening his own Taco Bell franchise. When I asked him why he thought that he would make a good Taco Bell franchisee, he jokingly responded, “Yo quiero Taco Bell” (a reference to their old marketing campaign).
The point is that he was so blinded by his desire to open one particular franchise, that he had no idea about anything other than the brand name.
So without further ado, we present five of our (favorite) potentially profitable franchises for 2015:
- Dickey’s Barbecue Pit – It’s one thing for a restaurant to tell you how profitable they are. For the most part they’re referring to the margins that can be made from their dine-in or take-out offerings. Well Dickey’s actually has 5 different ways to make money. To go along with dine-in and take-out, they also have retail items, catering, and special holiday meals. While the restaurant business can be a risky proposition, Dickey’s allows you to diversify how the money comes in, thus allaying some of that risk.
- Earthwise Pet Supply – It turns out that pet owners spend a lot of money on their pets. A LOT OF MONEY! And Earthwise is a pet supply store that can take advantage of that fact. By marrying the pet supply world with an organic spin, they’re able to be incredibly popular with customers. Franchising since 2008, Earthwise owners can really take advantage of this relatively young franchise.
- Fresh U – Relatively new to the franchisor world, Fresh U is a new technologically-driven healthy restaurant based out of Hoboken, New Jersey. Matt Rodrigue, the owner of Fresh U, keeps in close contact with us, and he continues to tell us that healthy food restaurants are very profitable. As Americans alter their diets to focus more on food that is better for them, they are often willing to pay a higher price. $7 smoothies would have been unthinkable 5 years ago, yet now they are here!
- Hobby Quest – Hobby Quest is a children’s educational franchise that is on our profitable list because of how quickly you can expect a good ROI on your investment. As a home-based franchise, there’s not a lot of pressure to recoup large startup costs. As soon as the revenue starts rolling in, the profit should as well. Never underestimate any business with low overhead, and Hobby Quest is particularly suited to take advantage!
- Real Property Management – There’s a lot of money in real estate, and owners are constantly looking for competent property managers. Some real estate owners will pay lots and lots for the ability to not have to think too much about their investment. That’s where you come in. By managing properties, you can gain access to some of the steadiest cash flows in the U.S., rents. As long as the owners are seeing their rent roll in consistently, you’ll keep seeing paychecks as well. What a deal!
If you’re interested in any of the franchises above, click on their name to be taken to a more detailed look at the requirements for opening a location.
Desperate Times Means Desperate Franchise Buyers
Early in my career, I encountered a franchise buyer who had made a rash decision that turned sour quickly. The funny thing was that he was intelligent, experienced and had a great deal of corporate knowledge – all the attributes that franchisors desire for their many franchise opportunities. I was intrigued that this experienced and generally deliberate person would make such a bad decision. So what went wrong?
Franchise Disclosure Document for Dummies – Part 2
If a franchisor does not offer refunds or installment terms (which is not unusual), it should include a “negative disclosure” to this effect in Item 5 (i.e. “We do not offer full or partial refunds under any circumstances.”).
Franchise Disclosure Document for Dummies – Part 7
In Item 17 of the FDD, franchisors are required to provide summaries and cross-references for 23 key provisions in the franchise agreement. A careful franchise prospect will have the entire franchise agreement reviewed in-depth by an experienced franchise attorney, but the Item 17 disclosures can provide a quick guide to use in a preliminary analysis of the franchise opportunity.