Introduction
It’s common for entrepreneurs to intensely search for the best opportunities to grow their capital. Lucky for you, the thorough analysis of franchising opportunities in the international franchise market will give insight on some of the wisest investments. First and foremost, it’s important to acknowledge the word “best” is subjective, and depends on the business scope of each individual portfolio. According to Franchise Direct, “the best way to determine a franchise’s future profitability is by analyzing Item 19 of the franchise’s franchise disclosure document (FDD), which outlines the business’s financial performance” (Lauckner 2020). Generally speaking, identifying the best franchise opportunity is a subjective decision based on industry preference, initial investment requirements, geographic location, size, degree of brand recognition, and so on. The specifics are crucial parameters to consider when deciding on the best franchise opportunity for a portfolio.
According to the Entrepreneur 2024 Franchise 500 Ranking index, the franchise that ranks superior amongst others is Taco Bell, a quick service restaurant (QSR) specializing in Mexican-inspired dishes whose initial investment ranges between $576K - $3.4M. It is important to mention some key factors that go into the Entrepreneur Franchise 500 ranking, including; costs & fees, size & growth, support, and brand strength.
UpFlip is a great franchise ranking data source that holds a list of the “15 most profitable franchises to buy” using the criteria of measurement of “the time it takes to make the initial investment back” (Boushy 2024). According to this database’s metrics, Express Employment Professionals, a familiar staffing agency that has been in operation for over forty years, is the best franchise to own in terms of return on investment (ROI). Investors typically see the target ROI less than one month in operation while the parent company maintains over 860 locations.
The second most profitable franchise according to UpFlip’s ranking standards is RE/MAX, an American real estate company that operates through an international franchise system. The average time to return capital is less than two months, making it a contender in the race for best franchise.
The NerdWallet Company offers information on what they consider to be the “best” franchise companies analyzing brand popularity and franchise size. McDonald’s amasses NerdWallet’s list as the best franchise, though they hold a notoriously high initial investment rate of between $1M - $2.1M. Second on NerdWallet’s list of the best franchises according to near popular demand is Dunkin’. The UPS Store swoops in as the third highest ranking franchise, demonstrating serious professional consistency by also earning a top 5 position among Entrepreneur Magazine’s Franchise 500 List. There are several factors that go into the ranking of a franchise but seemingly the risk associated with the concept is the most important asset for building a business portfolio.
As outlined above, deciding what the best franchise for someone to invest in is genuinely subjective according to an individual’s unique criteria. Notable metrics to analyze when deciding which franchise is best to invest in typically include initial investment rate, franchising fees, royalty fees, term length, degree of brand recognition, and more. A successful franchisor conducts the necessary due-diligence to ensure their investment will grow according to expectations.