Is it a good idea to start a franchise? Global successful stories
Starting a business from scratch is easier if you already have a path that others have paved for you. That is why opening a franchise is a good idea, think about it, it is not the same to start without some knowledge as to have a guide with mistakes and learn about what others have already experienced and have been able to verify what works and what does not.
If we compare it with sports, franchises can be successful using the experience of other people or previous groups just like in any sports discipline.
Next, we will see some success stories of franchises known worldwide, highlighting those related to sports.
What are the most profitable franchises worldwide?
When choosing a profitable franchise, we must consider several factors:
- The cost of the initial fee and the monthly costs
- The economic growth rate of the business model
- The support we receive from the head office
- The brand strength in the market
- Financial stability of the franchise, with proven processes and a stable presence in the corresponding sector
To know the best franchises worldwide, you can consult this article with a global ranking. Restaurants and fast food stand out.
Within the sports industry, a great example should be highlighted as the largest gym network in the world: Anytime Fitness. It has been in the ranking of the best franchises in the world for 15 years. In addition, this year they have achieved the 23rd position in the list of the 200 fastest-growing franchises on a global scale.
In the fitness sector, there are also others such as F45 Training (a network of gyms dedicated to functional training), Planet Fitness (operator of gyms with more than 2,000 locations), and Jazzercise (their classes combine choreography to the rhythm of music).
It is true that all these franchises require a large initial investment, but you can also look for other profitable franchises that operate with innovative services whose investment is very cheap.
Sportmadness is one of them, dedicated to offering know-how on more than 100 sports services divided into two business lines: events and schools. You will work together with private companies and public administrations, to offer the final client professional services within amateur sports.
If you want to know more about how to open a franchise visit this link.
Is opening a franchise a good investment?
Worldwide, one in seven businesses is a franchise, which is equivalent to two million franchised companies employing 19 million people. According to the US Department of Commerce, franchises contribute a staggering $2.3 trillion to the global economy each year.
These figures give an idea of the strength of the franchise's business model and the number of opportunities that exist if you know where to look.
Franchising is undoubtedly a win-win business for both franchisor and franchisee, as the franchisor can expand rapidly (and internationally), while the franchisee enjoys all the advantages of owning and running their own business without the risks inherent in starting a business from scratch.
Nowadays, thanks to technology and rapid digitization, franchises can be opened to offer online services, so you could easily open a franchise of a business model that has worked in another country from one day to another, without needing to invest in furniture, offices, personnel, or products.
Sportmadness offers this kind of franchise: sports services based on events and sports academies, so from the first minute, you will have the necessary technology and support to start your business from anywhere, in addition to products ready to sell and a recognized brand.
How much money is needed to open a franchise?
Currently, a franchise can be opened from 3,000€ although the most common is that they have an entry fee from 10.000€, the most common range is between 60.000€ and 80.000€
What are franchise fees?
It is an initial payment that is made to open the franchise. This investment makes it possible for the deal to go ahead and gives access to the business. The franchise fee is literally a license to own and operate the franchise business.
There is a monthly cost that you will have as a franchisee. It is known as royalty.
The franchisor usually collects a monthly payment, it can be a fixed cost or based on a percentage of the franchisee's income. This payment is made in exchange for the exploitation of the services and/or products offered by the franchise.
The most common franchise fees range are from 4% of revenue to 12% or more. The amount has to do with the type of franchise business
Types of franchises
There are different types of franchises depending on the variable we use to classify them. In this case, we will talk about the types of franchises according to the type of activity:
- Commercial franchise. The franchisor makes available to the franchisee everything he needs to develop his business.
- Industrial franchise. The franchisor transfers the manufacturing right, as well as the know-how and the marketing of its products. Example: restaurants.
- Production franchise. The franchisor produces what the franchisee sells, so this makes him an intermediary. Example: a clothing or sports equipment store.
- Distribution or product franchise. The franchisee distributes the merchandise that, in turn, the franchisor has acquired.
- Service franchise. The franchisor transfers his know-how to the franchisee. Example: any franchise that offers services. Sportmadness's business model and sports event and academy franchises would fit into this category.
- Mixed franchise. It is a combination between a distribution franchise and a service franchise.
Now that you have all the necessary information to search and open the franchise that best suits your needs and your situation, are you ready to start a franchise?
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