5 Characteristics of Highly Profitable Franchises
Not all franchises are created equal. You can have a franchise of a well known brand and not be successful and a lesser known franchise brand and be very successful. With that in mind, it makes sense to look for traits of highly profitable franchises. By knowing the traits of profitable franchises, you will be able to recognize patterns quickly and most importantly know when to jump on the right opportunity. At Bailey Brown Consulting And The Franchise Agency, we have compiled a list of the 5 Characteristics of Highly Profitable Franchises.
1. Location Location Location
Location is everything when it comes to a franchised business. Certain factors such as surrounding businesses, signage, and road traffic can play a critical role to the success of the business.
2. Dedicated Franchisor
Communication is key in business but especially between the franchisor and franchisee. The franchisor must be able to clearly direct and put the franchisee on the path to success. This is usually done with a sustainable model. It is also critical that franchisee support is efficient and it does not take an extended period of time to receive definitive answers.
3. Proven Track Record
It is important to go with a business that has a proven track record and has created many successful franchisees. This will lead to less risk and in the franchise world, risk avoidance is very crucial in some aspects.
Competition is very common in business but the ultimate goal is to be number one in whatever product or service you are providing. I believe that you do not necessarily want to be in a saturated market because it will not lead to any progress in the long run. It is very important that you are always at the top of mind when consumers think about your product category.
5. Pandemic/Recession Resistant
The pandemic has intersected with business on many levels but nothing more than when certain businesses were deemed “essential services”. In that sense, it makes sense to find a business that is pandemic proof and recession proof. Certain franchises will always weather the recession very well, while others are very susceptible to a rapid decline in sales and the possibility of permanently closing its doors. For example, Tim Hortons has always fared well during recession cycles because people do not go without their coffee and other treats when there is an economic downturn.