Profitable Franchises

How To Choose Profitable Franchises

When looking for profitable franchises, be cautious with “top” or “hot” lists as most are nothing more than sold ad lists.  Since franchises rarely release any data earnings regarding their current locations, the value of a franchise list is quite low.  These are usually created strictly for promotional value.

Of course when you start a business, a franchise is usually much easier than starting a company from scratch.  Companies that sell profitable franchises have typically been quite successful already and have specific developed formulas available to you so that you can be successful too.  So, how do you even begin to find a franchise that is right for you?  Below is a helpful guideline to follow when you begin your adventure of going into business for yourself.


The first step is to set a realistic budget that you are comfortable with and willing to invest in a franchise.  This will include all of the franchise fees, licenses, taxes, employee benefits and payroll for a full year.  The Franchise Registry by the Small Business Association is helpful in finding out which profitable franchises are approved for expedited funding if you feel that your budget costs will require a loan.


When choosing through the endless list of franchise opportunities, you should be looking for one that will match both your financial and personal goals.  Just because one is considered one of the most profitable franchises, does not automatically mean that it is the right choice for you.  Choose a product you at least like and that you will feel proud standing behind.  If you hate coffee, opening up a coffee franchise is probably not a good idea and if you are a vegan, you can probably forget about a hotdog stand.


To get an understanding of all of the legal aspects that are involved with franchising, you should visit the website to the Federal Trade Commission.  You will find a helpful glossary of terms there as well as some tips from experts on how to spot and avoid a bad investment.

Market Research

You may think that you have picked one of the most profitable franchises but if there isn't enough demand or clientele in your area, you will find yourself struggling.  Take some time and conduct market research on your product.  While you're at it, you should fully evaluate your competition as well.  This includes their product, price, how long they're been in the area and if their clientele seems overly loyal.  Don't underestimate that “mom and pop” operation that's been around your whole lifetime, especially in a small town.  Customers are loyal to a company that has treated them right through the years.


Most companies that are selling reputable and profitable franchises will generously provide you with references for current and past franchise owners.  This allows you to find out if they have had a positive experience as well as how successful they have been.  They can also offer you insight with how helpful the company is if you have questions or if you run into difficulties, especially in the start up phase.



It is quite helpful and always recommended to explore all of your potential opportunities.  You may find it easiest to use a spreadsheet to keep track of income and expense information and any other facts you find useful.  Always discuss contract terms and documents with an attorney.  Even if your franchise fails, there could still be legal obligations there that you are responsible for.

Don't Rush Your Decision

Purchasing a franchise is a huge decision that could affect the rest of your life.  You may be excited about the opportunity but don't jump into the decision.  Allow yourself a generous amount of time to investigate and be sure that you are making the right decision.  Never be scared to ask all of the questions that you need answered in order to make an educated decision.