How to spot a “hot” franchise

by | Mar 2, 2020 | Blog

“Dru, what are the hottest franchises these days?”

This is the first question people ask me when they find out what I do. 

And my answer typically surprises them. 

You see, after spending 14 years in franchising, my definition of “hot” is different than most people’s. 

For example, some of the least suspecting, most overlooked franchises can be cash cows. 

On the other hand, some of the “sexiest” franchises from the outside-looking-in have been terrible businesses to get into. 

I’ve also seen some people who were stuck in their careers invest in surprising franchises and find so much more happiness in their career while creating a tremendous amount of wealth. 

And I’ve seen some of the smartest people I’ve ever met pass on franchises that ended up being wildly successful businesses.

Being on the inside of franchising has taught me a lot and I want to share it with you if you’re thinking about starting your own business and buying a franchise. 

All that to say, my answer to what are the hottest franchises is typically “it depends.”

Sorry, boring answer.

Now, if you want the fun answer, I’ll tell you that a “hot” franchise is a business that…

✅ Solves a simple problem in a fragmented market with growing and built-in demand that is ripe for professionalization

✅ Provides an opportunity to help people – both customers and employees

✅ Has outstanding unit economics with high margins and recurring revenue

✅ It scales up quickly and can scale, and scale, and scale from there

✅ And, as it scales, a manager can run the day-to-day operations

✅ The franchisor has developed strong marketing systems that drive A LOT of customers CONSISTENTLY

✅ It also has a software and technology platform that automates the paperwork and more drives cash flow to the bottom line

✅ There is also purchasing power to drive costs down and centralized services that eliminate redundancy at the local level

✅ A proven leadership and management team is at the helm made up both industry and franchising vets who understand how to help franchise owners implement and replicate the business model

✅ Its made up of a network of growing, happy, and profitable franchise owners that learn from each other and help each other

✅ And, finally, a franchise that, down-the-road, I can sell for a big ol’ pile of cash when I’m ready to cash out…

So anyway, it’s stuff behind-the-scenes and under-the-hood of a franchise that I think is “hot.”

Now look, you’re not going to find any of these high-quality franchises I know about surfing the internet or going to trade shows.

If you want to learn how to become a savvy franchise investor and explore if there is a franchise out there that is the right fit for you, lets talk.

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The First Step is a Conversation.

If you have that burning desire to build your own successful business so you can live a life you can only have working for yourself, let’s talk.

The First Step is a Conversation

The first step is a pretty simple one: We have a conversation.

After we speak, we’ll be able to figure out if there is a good fit to work together.