12 Tips For Finding The Best Industries For A Franchise Opportunity

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Young Entrepreneur Council

YEC is an invite-only organization comprised of the world’s most successful entrepreneurs 40 and younger.

Lots of people want to be entrepreneurs, but not everyone wants to create and build a business idea from the ground up. For these individuals, investing in a franchise is a great way to enjoy the perks of entrepreneurship, while benefiting from an established business model and support system.

You can find franchising opportunities in just about every sector, from restaurants to fitness to education. The best industry for any aspiring franchisee to enter is one that sits at the intersection of their interests and market demand. We asked 12 members of Young Entrepreneur Council how to identify industries with good franchise opportunities. Here’s what they said:

Photos courtesy of individual members.

Entrepreneurs share a few things you need to know when considering a franchise.

1. Watch Where People Go

It is hard to reinvent the wheel. Chances are, you will have more success building on the existing and verifiable success of a concept that is popular in your area, then by bringing a new and fresh idea to town. This is hard to imagine, but ask yourself, how many coffee shops are within 10 square miles? Franchises should be based on what people like — even if it is already in your area. – Ryan BradleyKoester & Bradley, LLP

2. Conduct Research, Both Online And Offline

The Entrepreneur’s Franchise 500 Rankings is a great place to start. Browse through the entire list or run an industry-specific search. The International Franchise Association’s franchise directory lets you search according to the category or investment amount. If a franchise expo is taking place in the vicinity, make sure you attend it. Consider speaking with local brokers and consultants too. – Derek RobinsonTop Notch Dezigns

3. Consider The Geographic Fit

There is an abundance of resources online to help you choose from existing franchises. If you’re looking to franchise a business that doesn’t currently offer a program, you’ll need to do some serious market research. Just because a business works well in one (or more) locations, doesn’t mean it’s a guaranteed success. Whatever the business, be sure to assess geographic fit. – Ismael WrixenFE International

4. Look For Industries Where You Can Hire Management Teams For Multiple Locations

A lot of franchise owners just own one location, but the most successful franchise owners acquire multiple locations and have managers in place at those locations. This gives you the freedom to pursue the lifestyle you want. When looking into franchise opportunities, ask about the financials/economics of locations that are run by management instead of the owners. – Brandon StapperCrown Growth

5. Find An Industry That Lets You Play The Hero

Find an industry where you can enter the market and present yourself as the “hero” relative to the existing players. All good marketing is derived from good storytelling and if you can find an industry that needs a new or better hero, then you are on to something. Marketing is built in, all you have to do is deliver relatively better services, products and experiences. – Paul FordOrchestraRx

6. Create A Meetup Group To Test The Market

Before investing hundreds of thousands of dollars into a business that isn’t guaranteed to succeed, test the market with a Meetup group. For example, let’s say you were interested in opening up a yoga studio franchise, you could first create a yoga fitness class on Meetup.com and on Facebook events to see how many people are interested and show up on a daily basis. – Jared AtchisonWPForms

7. Consider The Future Potential Of The Industry

With technology moving so fast and the economy uncertain, you have to do plenty of research on the likely future of the company as well as the whole industry. It can be dangerous to invest in an outdated business model if the industry is on the verge of disruption. Choose a company with forward-looking management in an industry that’s likely to thrive in any type of economy. – Shawn PoratScorely

8. Focus On Scalable, Controllable Factors

The key to a good franchise business is the ability to operate successfully without anomalies — factors that might propel a single business to success but are ultimately uncontrollable, such as a “big personality” leader who is particularly motivating to a team. If your success depends on more uncontrollable factors than controllable ones, then it’s not going to work well as a franchise. – Baruch LabunskiRank Secure

9. Research What’s Growing And What’s New

There are a lot of lists that review the success and results of growing franchises each year. There are also exhibitions that you can look at who’s new and what type of potential they may have in the market. – Nicole MunozStart Ranking Now

10. Seek Strong Brand Recognition

When looking for a new franchise opportunity, look for a strong and positive brand recognition. Find out what customers are saying about the brand on Twitter. Is the overall message positive or negative? And most importantly, look at how the company responds to their customers on social media. – Syed BalkhiOptinMonster

11. Consider Whether There’s Room For Technological Growth

If you see an industry that has yet to adopt the latest technological innovations, you may be in the right place at the right time to develop the next Uber or Airbnb. By keeping your finger on the pulse of the latest tech trends, you may be able to identify an untapped niche for franchise development before anyone else. – Bryce WelkerCPA Exam Guy

12. Look At The Industry’s Supply And Demand

If you follow the supply and demand concept, you’ll most likely make a wise choice when it comes to choosing a good franchise. Ask yourself what do consumers actually need and why? The “why” needs to justify the demand and the supply needs to justify that demand. Otherwise, you might just be investing in something because you think it’s cool, and frankly, there’s not always money in that. – Derek BromanDiscount Enterprises LLC deguns.net