Even if you’ve JUST started exploring franchises, I am sure you’ve Googled, “What are the hottest franchises right now?” Don’t waste your time! Here’s why.
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Why is Googling hot franchises a total waste of time? The number one reason is, when you’re looking at a rank of franchises, it doesn’t tell you about the franchisor’s strengths. Rankings are generally based on total system-wide sales. System-wide sales are one indication of the system’s health, but there are many other factors that come into play that will determine how happy you will be as a business owner.
For example, interviewing the existing franchise owners to see how happy they are, determining whether they would do it again based on their decisions and knowing what they know now. That is infinitely more important and valuable to you, as a potential franchisee in that system, than how that company ranks on the top 500 list. Now I get that franchisors love the bragging rights of moving up the ranks in Entrepreneur’s 500, who wouldn’t, right? It’s a sign of a healthy, growing system. But as a Franchise Consultant, who has literally helped thousands of people go down this path of exploring franchises to try to select the right one—I’m telling you—using the ranking to determine if this is a good business is absolutely not a good idea. It’s not part of the criteria that I would present to you.
The most important factor to selecting the right business is finding a franchisor that offers a partnership to you. Franchising is a partnership; it’s a relationship. So, when you’re doing your due diligence, the most important thing you can do is get to know the people. I would even say put the FDD off to the side. What’s in an FDD is not inspiring. It’s not going to teach you about the culture. It’s not going to teach you about the vision of the company. But by spending time with the franchisor and the leadership team, you’re going to get to understand their vision and their toolbox—the tools that they’ve created to help you become a successful business owner. These are things that you can’t get by Googling “hot franchises.”
Another big factor in selecting the right business is: can you afford the investment? The Top 500 rankings do not tell you about the investment parameters. That’s going to come through your due diligence by interviewing existing franchise owners. Another important factor in your success in a franchise—that has nothing to do with how the company ranks on the Top 500 is: what is the primary skill that an owner requires? If a Top 500 business requires strong operational skills—but your salesperson, right?—there could be a disconnect between what you want to wake up and do every day and what that business is going to require of the owner to drive its success. If you’ve come from big corporate America and looking for a way out, you may not want to partner with a franchise that feels like big corporate America. Some franchisors are young entrepreneurial companies, and there are franchisors that are billion-dollar organizations. Does the Top 500 rankings tell you that? Earnings claims and rankings give bragging rights to franchisors. But they don’t necessarily lead to true success or happily ever after as a business owner in a franchise.
There is no “one size fits all” franchise. The franchise that’s right for you may not be the franchise that’s right for me. The franchise that’s ranked number one on the Top 500 list may be a great organization. But if the investment doesn’t match my investment parameters, the skill sets that are required to run that business does not match the skills I want to use, or the company’s size doesn’t feel like the right culture—then, no matter how that company is ranked, it will probably not lead to happily ever after for me. I don’t want to scare you away from Googling Top 500 franchises. There’s never any harm in getting educated.
When you’re serious, and you’re ready to find the right franchise business for you that will match your interests, skills, and finances—please reach out to the Daly Coach. You can leave a comment below or email me right now! I’d be happy to help you find your perfect franchise business.
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