What Are the Most Profitable Franchises to Own?
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Though the profitability of a franchise can fluctuate year over year, there are a few franchises who manage to consistently stay on top. Your net profitability depends partly on how much you invest up-front. Some franchises show immediate and large returns, but remember that you’ll have to pay back any loans you took out to open your location.
We broke out our rankings according to which franchise brands are the most consistently profitable at different levels of investment, though numbers tend to vary greatly depending on location and investment variables. High Level Investment: greater than $500,000. Medium Level Investment: between $150,000 and $500,000. Low Level Investment: less than $150,000. Rankings were based on data compiled from Fortune and Entrepreneur, but arranged according to our own evaluation.
High Level Investment: Greater than $500,000
Overview: McDonald’s is one of the most recognizable fast food restaurants across the globe. They sell hamburgers, fries, shakes, and more.
Number of Locations: 36,900 in December 2016
Average Initial Investment: $1,008,000 – $2,214,080
Brand Outlook: Though franchise fees are high, brand outlook and recognizability is high – which is a key component in the pros of opening a franchise business. As one of the most successful models, this franchise has its business model and practices down to a science making it a pretty sure thing for profitability and growth for investors.
Overview: Dunkin’ Donuts is a donut company and coffeehouse that serves a worldwide audience.
Number of Locations: 11,000
Average Initial Investment: $228,620 – $1,691,200
Brand Outlook: This can range from a mid to high level investment depending on where the chips fall in terms of real estate and license fees. This brand has seen an upward trajectory with a lot of resources for franchisee support. Brand strength is high, making it a great opportunity for many investors, especially those that are on the lower end of average initial investment costs.
Overview: Sonic is a fast food restaurant specializing in car-hop service selling burgers, hot dogs, tater tots, drinks, and more.
Number of Locations: 3,212 in 2016
Average Initial Investment: $1,073,000 – $2,361,500
Brand Outlook: Sonic is a steady brand that offers all of the perks that make franchise ownership and investment a comfortable risk. With average franchise fees, consistent profit, franchise support, and sizable brand strength, it’s a high initial investment with high profit.
Medium Level Investment: Between $150,000 and $500,000
Overview: 7-Eleven is an international chain of convenience stores.
Number of Locations: 56,600
Average Initial Investment: $37,550 – $1,149,900
Brand Outlook: Many 7-Eleven locations are stationed outside of the U.S. and have locations in numbers even higher than McDonald’s. For that reason, initial investment costs vary from very low to very high. However, this doesn’t change the fact that this brand’s outlook is consistently high and comfortable for investors deciding to buy a 7-Eleven franchise.
The UPS Store
Overview: The UPS Store provides packaging, shipping, copying, printing, and mailing services across the globe.
Number of Locations: 4,700
Average Initial Investment: $177,955 – $402,595
Brand Outlook: This franchising option is a bit more affordable for investors with a lower initial investment, net-worth requirement, and liquid cash requirement. With a positive brand outlook, low fees and a consistent business model make this a great opportunity for investors.
Overview: Great Clips is a hair salon chain with flexible hours for customers.
Number of Locations: 4,100
Average Initial Investment: $136,000 – $258,250
Brand Outlook: This brand isn’t as old as many others that nab the top spots of many “top franchise” lists, but still manages to stay on top consistently. Initial investments are lower and have a high growth potential. Not only that, but operating costs are lower and maintain better than some other franchise types.
Low Level Investment: Less than $150,000
Overview: RE/MAX, or Real Estate Maximums, is a global network of real estate agents.
Number of Locations: 6,800
Average Initial Investment: $37,500 – $225,000
Brand Outlook: This is another franchise option with investment costs that have a big range due to the diverse locations they call home across the globe. The outlook for RE/MAX has been so consistent for so long with franchise fees and initial costs so low for investors, it’s been on the top of “top franchise” lists consistently.
Overview: Servpro is a restoration business specializing in fire and water cleanup as well as disaster recovery.
Number of Locations: Over 1,700
Average Initial Investment: $158,075 – $211,950
Brand Outlook: Though this brand isn’t a household name for everyone, it’s a franchise making a name for itself across the U.S. and Canada. Low startup costs and franchise fees paired with a steady rise in profitability has made it a top contender for profitable franchises.
Overview: uBreakiFix is a company offering repairs for electronics including smartphones, tablets, computers, and video game consoles.
Number of Locations: 283
Average Initial Investment: $60,400 – $220,850
Brand Outlook: The youngest business on this list is uBreakiFix which was founded in 2009 and didn’t begin franchising until 2013. However, it’s a topical business measuring up to the needs of today and is growing rapidly with an already successful model that seems to be getting better the longer it’s around.
Profitability can sometimes be hard to measure. For franchise ownership, it’s not just about the profit, it’s also about all of the other factors that go into it. Things like initial investment fees, royalty fees, real estate, location, and brand outlook are all pieces of the puzzle that make up the big picture of franchise ownership and how it works.
Though many of these numbers are ever changing, these franchises have proven themselves over the lifetime of their companies – whether founded 50 years ago for 5 years ago. Past performance is never a guarantee of future profitability. While some brands on this list — like McDonald’s — have managed to turn a profit over several decades, others broke onto the scene only recently and already rank among the best. However, market trends, technology, and consumer tastes are always changing, so it pays to look at other factors and do your own research before investing in your own franchise location
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Chelsy is a writer from Montana who now lives in Boise, Idaho. She graduated with her journalism degree from the University of Montana in 2012. She enjoys talk radio, cold coffee, and playing Frisbee with her dog, Titan. Follow Chelsy on Twitter @Chelsy5
This post was updated February 1, 2018. It was originally published February 2, 2018.