Most Profitable Franchises in 2019April 12, 2022
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What Industry has the most profitable franchise at 35 million dollars a year from a single location? We’ll look that industry as well as lower investment franchises that are generating 6 figures. How much some of the top food franchises are earning today on franchise city.
The reigning champion and most profitable franchise we have ever seen for a single unit, so not owning multiple territories but a single franchise – was 35 million dollars gross revenue in a single year. It actually increased a couple of million over last year. This business is in the sign industry, and last year we had comments from people suggesting that signs are not that profitable. “Oh I know someone who owned a sign shop and they didnt do too well” Keep in mind signs today is not just making 100 signs for 1 dollar each. Think billboards 50 at a time, trade show displays, wide format printing, car wraps, check these out this is exciting stuff. Sometimes you might do fleets of 500 car wraps or more. And here is why the franchising model works. You can open a small shop on your own and focus on making little signs for a dollar each and complain about how the sign industry is dead, or you can partner with a big corporation, with huge national accounts, that operates at higher level, and has you doing some really unique jobs. A contract that has 500 car wraps, or all the posters in an airport, or massive billboards, pay much more than a dollar a sign. That’s another benefit of joining a franchise its just not realistic to get these huge accounts as an individual just starting out. But when you join a company that has already done all these huge jobs you can credibly bid on them from day one. So single most profitable franchise – still the sign industry. Your investment to open a sign franchise about $200,000 $250,000 including working capital.
Now most people don’t know how that stacks up against say a McDonald’s franchise. Well a McDonald’s will cost you between $1,058,000 to $2,230,000 to open, and the average unit volume for a single restaurant is 2.6 million. But that money isnt going into your pocket. Same with the business above. You are probably looking at 5-8% margins in most fast food franchises. Up here on the screen we have gross earnings listed of many of your favorite restaurants – right there in the yellow column if you want to pause the video and take a look. These numbers are in thousands of dollars.
So we can see that from the perspective of the biggest quick serve food franchises anyway, the most profitable is Chick-fil-A at over 4 million dollars per store. But keep in mind your royalties and expenses are completely different with these franchises so in some cases even when your gross earnings are higher you actually make less money. We covered that in previous videos. It’s the same with any business – the number that really matters is how much remains after your royalties and expenses. Now a lot of people want to own is a Subway, world’s biggest franchise, very successful – but how much do they make – we need to scroll all the way down to the bottom of the list to see an average Subway is doing $416,000 a year before expenses. They are the second lowest on the list. This is why we suggest in all cases people at least look at several options before they invest in any franchise.
Two very profitable franchise sectors today that can earn into the millions are staffing franchises, and senior care. Senior care very much in demand right now as 10,000 baby boomers are turning 65 every day and many of them require help with daily functions. We have seen single unit franchises in both in senior care and staffing earning upwards of 20 million dollars a year. Staffing franchises and senior care typically in the $80,000 to $180,000 investment range. Owners need to be good at building and managing teams, and creating relationships in their communities. This isn’t a business where people just walk in and buy a haircut or a hamburger. So it takes a special type of owner to do well in these types of operational models.
Most importantly – Every single one of the franchises we just discussed, even the highest earning franchises – also has franchises in their system that failed. Just because one franchise makes 35 million does not mean that you will. There are hundreds of variables to consider including your abilities, your strengths, your local market demand and demographics, your ability to follow a system and lots more. The most profitable franchise for YOU will be the one that most closely aligns with all of your very individual skills, strengths, market demand and business goals. What is most profitable for one person will be a terrible fit for another.
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