List of the Best Franchise Fee Structures and ROIs

List of the Best Franchise Fee Structures and ROIs

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Buy In Or Start Up?

A big question many entrepreneurs wonder about is if they are better off buying into an existing franchise, or starting their own new business.

If you have an entrepreneurial drive, then you need to consider what type of business works best for you. Becoming part of an established franchise network, or starting from scratch on your own?

The first one allows you the chance to be part of a larger community network, which can help you at times but also be a limiting factor. The second option gives you total control over all aspects of the business, which is both invigorating and exhausting at the same time.

Surviving the Start-up Stage

On average, 1 out of every 4 start-up businesses fails in their first year of operation. After 4 years only half of business start-ups remain open and operational. Statistics have shown that less than 30% of businesses survive for 10 years.

The costs of starting a business varies greatly based on location and sector. In the U.S. the acreage cost of starting a new business is around $10,000. Buying into a franchise or building a new location, typically costs between 500,000 and 1 million dollars. Though, the price depends on the particular franchise in question. For example, starting a Subway establishment has an initial fee of $15,000, and then opening a location will cost around $250,000.

The Pros and Cons

Freedom or safety. That is ultimately what an entrepreneur has to choose between when deciding to go with a franchise or independent business.

Independent Business

Pros:
• Flexibility
• Freedom of choosing products and services
• Profitability
• Complete control of operations

Cons:
• Tougher competition
• More than 40 hours of work a week
• No provided health benefits

Franchise

Pros:
• Corporate support
• Access to detailed marketing plan
• Existing brand awareness
• Long standing training programs
• An established system of operation
• Bulk buying power

Cons:
• High franchise fees
• Strict rules and guidelines
• Company trouble can impact your local business
• Lots of legal documents to deal with

Popular Businesses

According to a report by IBISWORLD, here are the three top start-up industry sectors:

- Social networking game development
- Relaxation Beverages
- Corporate wellness services

Here are the top five franchise businesses which will give the highest return on investment, compared to other franchises.
1. Snap-on
2. 7 Eleven
3. Aaron’s
4. Panera Bread
5. ServPro

This is according to research from Forbes. These five franchises make for good candidates for any potential franchisees, or at the least can give some great insight into what makes a successful business.