Profitable Franchises & How to Find Them

Finding profitable franchises is an important first step for any entrepreneur.

If you are serious about starting a business, then you have to conduct your research carefully to find an opportunity that has real potential for long-term success. If you make your decision too hastily, you could wind up buying a franchise that is doomed to lose money, month after month.

So, how do you identify truly profitable franchises and separate them from the duds? Here are some simple tips.

Finding profitable franchises

Ask the franchisor for actual numbers
This is perhaps the quickest and most straightforward way to determine how profitable a business is. Simply ask the franchisor to provide specific information on potential profits, as well as the profitability of its existing franchise businesses that are already in operation.

By law, franchisors are required to provide this information in their franchise disclosure. But it’s up to you to look closely at the figures and determine how they could translate to your own profitability.

Drill down to product costs vs. sale price
When calculating profitability, a good starting point is to simply compare how much it costs to maintain product inventory (or how much to deliver a service) with how much you’ll be selling it for. Of course, there are many other variables that will affect your profits, but this will give you the most fundamental view of what you’ll earn per sale.

Higher profits per sale don’t necessarily always translate into profitable franchises, as you’ll see below. But the higher the profits per sale, the better, because you will need those earnings to offset the costs of your operation.

Factor in all operating costs
Employees, real estate, utilities, fees – these are all expenses that will affect your bottom line. Even if the product itself is extremely profitable, you could lose that money instantly if you’re not operating your business cost efficiently.

Take all costs into consideration to give a more high-level view of how much money the business will really generate on a daily, weekly, monthly and yearly basis.

Don’t forget about start-up costs
Even the most profitable franchises can take years to pay off because of the start-up costs that are required. Larger businesses like restaurants can easily set you back hundreds of thousands of dollars, just to get the business off the ground.

When looking at profitability, an important question you always need to ask is: How long will it take to become profitable when sales are X (bad), Y (okay), or Z (good)?

Consider outside variables
Things like the location of the business and the local demographics are important factors that affect profitable businesses. Be sure you or the franchisor has done extensive research on the location to make sure there is enough demand in the area and minimal competition.

One of the most profitable franchises available today

HUMAN Healthy Vending offers a simple, enjoyable and lucrative business that generates the highest profits in our industry. We are dramatically overhauling the vending landscape by making healthy foods and snacks more convenient than junk food. We’re achieving this goal by installing the most innovative and high-performing vending machines across North America.

Contact us today to learn more on how you can get involved with our profitable vending opportunities.

 

 

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