If you’re ready to run your own business the idea of being part of a franchise can be tempting – after all, you have the advantage of starting with a brand that’s already established. The question is, which franchises are worth taking an interest in?
AllBusiness.com does an annual “AllStar Franchises” list where they determine the most promising franchise to invest in based on growth, financial strength, and brand awareness among other things. Below is the a summary of which businesses made the top five.
1. Subway Shops
No newcomer to the list, Subway made it to number one for the fourth straight year in a row. Among the reasons for its top ranking, Subway includes top brand awareness, strong growth, and locations everywhere. In terms of operating costs, the cost of total investment ranges from $84,000 to $258,000, with a franchise fee of $15,000 and a royalty fee of 8%.
2. 7-Eleven Stores
Moving up from number 6 last year, 7-Eleven owes its higher ranking to the improvements in longevity, brand awareness, and growth. 7-Eleven is also franchisee-friendly, and has been known to buy the land, building and equipment in addition to building the store.
3. Jimmy John’s Gourmet Sandwiches
Based in Illinois, Jimmy John’s crept from number 5 to number 3 in large part because its franchise fee is $35,000, with a royalty fee of 6%, and a total investment of $306,000 to $461,000. The chain also ranks 7th in web visibility and 16th for growth.
4. Dunkin’ Donuts
Moving down from number 2 last year, Dunkin’ Donuts still has high ranking in brand awareness (5th), and has been trying to expand the business outside its home region. Oftentimes pairing with Baskin-Robbins ice cream, the franchise fee for Dunkin’ Donuts is $40,000 to $80,000, with a royalty fee of 5.9% and a total investment of $358,000 to $2 million.
5. Kumon North America
A tutoring center for elementary school students, Kumon’s ranking has shot up from 21st place last year to breaking into the top 5. The company has 25,000 centers with 4 million customers, and has low costs associated with its startup. A franchise fee is $1,000, a royalty fee is $32 to $36 (per student, per subject) each month. The cost of total investment is $68,000 to $145,000.
A franchise is a great possibility to begin a new career as your own boss, but it still requires the same dedication, time and effort as any business built from scratch. Learning the cost (financial as well as emotional) associated with any type of business is important to research, and looking at successful franchises helps in gaining that understanding. After all, any successful business owner will tell you that being prepared is your best chance for success.