Whether you are looking to build a side business or a full-fledged one, investing in a profitable franchise can give you a headstart. If you expect wonderful future returns on your investment, we suggest that you go for franchises. Franchising can turn out to be one of the best ways for entrepreneurs to start their own successful businesses.
But the competition is the franchise market is getting tighter and tighter every day. From businesses that ask for ridiculously large initial investments to companies that provide very little support in exchange for their high fees, it can be very difficult to figure out your way around franchises. But we have researched the market and compiled a list of 10 most profitable franchises you can invest in 2020. Read on to find out!
Top 10 Most Profitable Franchises of 2020
What is a Franchise Business?
Franchise business is when owners of already established businesses allow entrepreneurs or independent business owners to do business under their brand. The former is a franchisor and the latter is the franchisee. Franchisors agree to lend help to the franchisee in merchandising, training staff, setting up, and more, in exchange for compensation.
Examples may include KFC, McDonald’s, Dunkin’, and such. Their restaurants are owned and operated by independent business owners across the world, with permission and assistance from the franchisors.
Also, learn How to Get a Business Loan!
Pros of Franchise Business:
- Less Risk: Starting with a franchise business offers you the leverage of an established brand and successful business model.
- Guidance: Even if you don’t have much prior business knowledge, it won’t be a problem. You are sure to receive the necessary guidance from your franchisor.
- Stable Business: Franchise business certainly offers stability that a brand-new startup does not have.
Cons of Franchise Business:
- You are bound by franchise agreements and have limited freedom in your business.
- Since you don’t own the brand, rather you’re only working under another’s name; your effort won’t translate to long-term benefits and fame.
- Your reputation is as good as the brand name. A bad performance by another franchisee can affect your business.
Having covered the basics of the franchise business, we hope that you have received the heads up that you needed. Let’s dive into our picks of the 10 most profitable franchise businesses of 2020.
Initial Investment: $1.3 M to $2.2 M
McDonald’s is arguably one of the most successful franchises in the world. With an initial investment of at least a million, you can expect nothing less than a golden arch of your own. This fast-forward franchise tops our list for its more than $80 Billion annual sales.
It has over 30,000 outlets across the world. With a sheer size that is larger than most of the franchises, it is one of the most profitable franchises of 2020.
Initial Investment: $47 K to $1.2 M
Being the world’s largest convenience store, 7-Eleven affirms its position in this list with its huge network of 50,000 retail stores across over 15 countries. 7-eleven is known for its elite franchise model that continues to satisfy customers.
Including applications, tests, and training, you can get started with the franchise within 3 to 6 months.
Initial Investment: $1.4 M to $2.8 M
Backed by a network of 16,000 outlets in over 125 countries, KFC has evolved over the years to be a tremendously successful franchise. It serves more than 12 million customers every day and generates over $6 billion in revenue per annum. It is one of the best investments that you will ever make.
Initial Investment: $40 K to $284 K
RE/MAX is one of the most profitable franchises, having served the market for over 40 years. They have a huge network of more than 100,000 agents spanned across 100 countries. Moreover, their initial investment is relatively affordable at only $38k.
With a strong global presence and well-developed marketing strategy, RE/MAX advocates for the freedom of franchisors.
6. Dunkin’ Donuts
Initial Investment: $396 K to $1.6 M
Billed as America’s premium donut store, Dunkin’ Donuts has evolved over the years and spread across 36 countries with more than 12,000 franchisees. They provide training and assistance with location selection, operations, and marketing to their franchisees. Moreover, the donut chain generates annual sales of over $1 Billion, making it one of the top franchises in the world.
7. Ace Hardware
Initial Investment: $286K to $2.1M
Ace Hardware is dubbed as one of the world’s largest hardware retail chain. The franchise was founded in 1924 and has experienced robust expansion since then, spanning across 5,200 locations worldwide.
With a revenue generation of over $4 Billion per annum, Ace Hardware affirms its position in the list of most profitable franchises in the world.
8. Dairy Queen
Initial Investment: $1.1M to $1.8M
Dairy Queen is a very popular ice-cream joint as well as a fast-food restaurant, operating thousands of franchises in the world. Generating annual revenue of more than $2 billion, Dairy Queen has made a name for itself among business people and customers worldwide.
9. Taco Bell
Initial Investment: $526K to $3M
Taco Bell is a restaurant chain made popular by its wide variety of Mexican inspired cuisine, including tacos, nachos, and burritos. They generate over $900 million annual revenue from over 6000 franchises around the world. Upon franchising, Taco Bell is sure to bring good fortune to your establishment.
Taco Bell is a subsidiary of Yum! Brands Inc. which also franchises Pizza Hut and KFC.
Initial Investment: $106K to $393K
Operating in over 100 countries Subway is one of the largest sandwich chains in the world. On average, each Subway store generates over $400,000 in revenues per annum, making it one of the most profitable franchises in the world.
To sum up, as the franchise market keeps growing every year with new businesses joining in and old ones innovating and evolving, you are surrounded by thousands of franchise options. However, anyone of our top picks of the most profitable franchises is sure to bring you good fortune and tremendous profit.
You may also check How to Start a Restaurant Business!