Top 20 Franchises for Beginners
In this article, we will discuss the top 20 franchises for beginners. If you want to skip our detailed analysis, you can go directly to Top 5 Franchises for Beginners.
On September 20, the International Franchise Association (IFA) released its annual franchisee survey for the second time this year in partnership with FRANdata. The report entailed a detailed analysis of the impact of inflationary pressures on franchised businesses. According to the report, while inflation significantly slowed down this year compared to 2022, franchised businesses were significantly impacted by rising costs.
The survey was conducted by FRANdata for IFA, accounting for almost 1,300 franchises across the US. Among the 1,300 franchises surveyed, 86% reported they felt significant impacts of rising costs on their operations. Moreover, 9 out of 10 had to raise prices to combat cost increases, while 3 out of 5 regarded the food category as the most severely hit by inflationary pressures. However, compared to regular businesses, franchised businesses showed remarkable financial performance attributable to a strong network, franchisor support, and brand reputation.
Notable Franchise Businesses For Beginners
Some top franchises to invest in as a beginner include 7-Eleven and Batteries Plus. You can also check out some of the low cost franchises with high profits.
Batteries Plus is a leading franchise network engaging in the sale and recycling of batteries. On September 18, Batteries Plus announced its expansion plan entailing the establishment of 10 new locations in San Diego and nearby communities. The aggressive strategy by the company is spread over 5 years. The franchise currently owns more than 700 stores and hopes to add 45 new locations by the end of this year.
7-Eleven is owned by Seven & i Holdings Co., Ltd. (OTC:SVNDY). The convenience store chain by Seven & i Holdings Co., Ltd. (OTC:SVNDY), based in the United States, is one of the pioneers in introducing new and unique products regularly. On October 17, 7-Eleven reported the launch of new and exciting products and deals for Halloween. The company also rebranded its world-famous Slurpee drink to an MTN DEW PITCH BLACK for the occasion. Seven & i Holdings Co., Ltd. (OTC:SVNDY) has been employing such techniques since its inception, explaining its popularity among people of all ages, especially kids.
Large Franchises at a Glance
The restaurant industry is home to some of the largest franchises. These include Domino's Pizza, Inc. (NYSE:DPZ), Yum! Brands, Inc. (NYSE:YUM), and Wingstop Inc. (NASDAQ:WING). You can also check out some of the cheapest restaurant franchises with low total investment.
Domino's Pizza, Inc. (NYSE:DPZ) is a leading fast food chain operating globally. On October 12, Domino's Pizza, Inc. (NYSE:DPZ) reported earnings for the fiscal third quarter of 2023. Domino's Pizza, Inc. (NYSE:DPZ) reported earnings per share of $4.18 and beat EPS estimates by $0.88. The company also reported a revenue of $1.03 billion for the quarter.
Yum! Brands, Inc. (NYSE:YUM) is a fast food corporation in the United States. Some of the prominent fast-food brands operating under the company include KFC, Taco Bell, and Pizza Hut, to name a few. On July 6, Yum! Brands, Inc. (NYSE:YUM) reported selecting Treasure Data as a customer data platform. The platform aims to enhance the customer's digital experience. The new platform integrates artificial intelligence to provide important insights to the company, enabling the company to conduct personalized marketing campaigns. The data cloud system is designed to view a centralized picture of a customer across all Yum! brands. Cameron Davies, Chief Data Officer, Yum! Brands stated:
"Treasure Data’s state-of-the-art CDP solution brings unparalleled capabilities to unify, manage and activate customer data across our four brands and third-party platforms, empowering our ability to gain deep insights into customer behavior and preferences. This CDP solution will enhance both our understanding and engagement with Yum!’s customers, ultimately driving more personalized and unique interactions. We are excited to leverage our global scale to continue to make progress in the CDP space and unlock additional value while working with a company that shares our commitment to customer data safety, security and privacy."
Wingstop Inc. (NASDAQ:WING) is an American chain of restaurants engaged in the sale of chicken wings. Analysts are positive on Wingstop Inc. (NASDAQ:WING). On October 17, Citigroup analyst Jon Tower mantained a nuetral rating on Wingstop Inc. (NASDAQ:WING) and raised his price target from $185 to $198. Over the past 3 months, 6 Wall Street analysts have recommended to Buy the stock. Wingstop Inc. (NASDAQ:WING) has an average price target of $195.5 and a high forecast of $225.
As a beginner, starting a franchise may seem like a viable business option due to the support from the franchisor along with a strong brand reputation. However, beginners must weigh their options before investing in the right franchise. With that, let’s look at the top 20 franchises for beginners.
Top 20 Franchises for Beginners
Our Methodology
To compile our list of the top 20 franchises for beginners, we initiated our selection process by identifying well-established franchises. Our initial research involved scanning various reports on the internet, including Hubspot, nerdwallet, and Franchise Help. Our research led us to develop a hypothesis that for beginners, it is prudent to consider franchises with low risk and strong financial performance. To create an initial pool of 40 established franchises, we consulted Franchise Direct's top franchises list.
Subsequently, to rank our top 20 franchises for beginners, we consulted Vetted Biz to obtain data on the franchisor's net income for the most recent year. In cases where information on net income was not available on Vetted Biz, we resorted to Growjo's estimated annual sales revenue figures for the parent companies. Our final selection of the top 20 franchises for beginners was based on a combination of net income and estimated annual sales revenue. The list is in ascending order of the aforementioned metric.
Top 20 Franchises for Beginners
20. HomeWell
Franchisor Net Income (2022): $461,000
HomeWell is one of the leading home care providers and is ranked among the best franchises for beginners with a franchisor net income of $461,000 for the year ended 2022, as reported by Vetted Biz. According to Franchise Direct, the total franchise fee is $49,500.
Domino's Pizza, Inc. (NYSE:DPZ), Yum! Brands, Inc. (NYSE:YUM), and Wingstop Inc. (NASDAQ:WING) own some of the biggest franchises in the world.
19. Gotcha Covered
Franchisor Net Income (2022): $487,000
Gotcha Covered is a window coverings franchise providing window treatments to companies and residential customers. According to Franchise Direct, the minimum cash required to start the franchise is $50,000 and the franchise fee is $69,900.
18. Dog Training Elite
Franchisor Net Income (2022): $596,000
Dog Training Elite is a dog training franchise offering a range of programs to customers in their homes. According to Franchise Direct, the minimum cash required to start the franchise is $120,000 and has a franchise fee based on the number of territories.
17. Poolwerx
Franchisor Net Income (2022): $816,000
Poolwerx is a retail pool and spa service business based in the United States. According to our methodology, Poolwerx is among the top franchises for beginners, with a franchisor net income of $816,000 for the year ended 2022, as reported by Vetted Biz. The minimum cash required to start the franchise is $75,000.
16. Grease Monkey
Franchisor Net Income (2022): $1.3 Million
According to our methodology, Grease Monkey, an independent franchisor of automotive service centers, is one of the best franchises for beginners. The franchise offers oil changes and maintenance among other car care services. The franchise has a franchise fee of $39,900.
15. The Code Wiz
Estimated Annual Sales Revenue: $1.4 Million
The education franchise focuses on equipping children with the necessary skills in coding and robotics. According to Franchise Direct, The Code Wiz requires minimum cash of $50,000 to start the franchise.
14. ClaimTek Systems
Estimated Annual Sales Revenue: $1.4 Million
According to our methodology, ClaimTek Systems is one of the best franchises for beginners, with an estimated annual sales revenue of $1.4 million, as reported by Growjo. The medical and dental billing franchise network requires a minimum of $25,000 to start a franchise.
13. Signarama
Franchisor Net Income (2022): $2.6 Million
Signarama is a leading advertising and sign franchise. The franchise has over 700 stores globally and has online stores that operate 24/7. According to Franchise Direct, Signarama requires $60,000 in minimum cash and has a franchise fee of $49,500.
12. Sylvan Learning
Franchisor Net Income (2022): $4.7 Million
According to our methodology, Sylvan Learning is one of the best franchises for beginners, with a total franchisor net income of $4.7 million for the year ended 2022, as reported by Vetted Biz. Sylvan Learning is an education provider for students in grades k-12. The franchise network has over 710 locations across the globe. The minimum cash required to start the franchise is $75,000 and it has a franchise fee of $34,900.
11. AAMCO Transmissions & Total Car Care
Franchisor Net Income (2022): $10.5 Million
AAMCO Transmissions & Total Car Care is a transmission repair franchise based in the United States. The franchise has a huge network of transmission specialists and is a leader in total car care services. The brand currently has over 600 automotive centers across the United States.
10. StretchMed Studios
Estimated Annual Sales Revenue: $16.3 Million
StretchMed Studios is one of the best franchises to start as a beginner. The franchise network offers one-on-one stretching using a combination of PNF (Proprioceptive Neuromuscular Facilitation) and static stretching techniques. According to Franchise Direct, the minimum cash required to start the franchise is $100,000, and it has a franchise fee of $49,500.
9. Papa Murphy's Take "N" Bake Pizza
Franchisor Net Income (2022): $19.6 Million
According to our methodology, Papa Murphy's Take "N" Bake Pizza is one of the top franchises for beginners with a franchisor net income of almost $19.6 million for the year ended 2022, as reported by Vetted Biz. The restaurant company has over 1,250 locations across the United States and requires a minimum of $125,000 to start the franchise. The franchise fee is $25,000.
Domino's Pizza, Inc. (NYSE:DPZ), Yum! Brands, Inc. (NYSE:YUM), and Wingstop Inc. (NASDAQ:WING) are some of the leading names in the restaurant industry.
8. Cruise Planners
Franchisor Net Income (2022): $28.3 Million
Cruise Planners is a home-based travel agent franchise network. The franchise books luxury tours, vacations, and cruises to travel destinations across the world. According to Franchise Direct, the minimum cash required to start the franchise is as low as $7,000.
7. Paul Davis Restoration
Franchisor Net Income (2022): $49.9 Million
As the name suggests, Paul Davis Restoration offers services in residential and commercial cleanup and restoration for any disasters. According to Franchise Direct, the minimum cash required to start the franchise is $50,000.
6. Accessible Home Health Care
Estimated Annual Sales Revenue: $125.9 Million
According to our methodology, Accessible Home Health Care is one of the best franchises for beginners. The franchise offers in-house medical help to seniors and elders in times of need. According to Franchise Direct, the franchise requires an initial investment of $100,000 and has a $45,000 franchise fee.
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Disclosure: None. Top 20 Franchises for Beginners is originally published on Insider Monkey.
