how franchises make money

You are probably hearing a lot of buzz about franchises right now, but you might not know too much about what they are and what industries they are most successful in.

Here is what you need to know about how franchises make money and what the most profitable industries for franchises are.

There are typically two participants in a franchising relationship, the franchisor and the franchisee. The franchisor is a successful business owner looking to expand and make more money by licensing their trademark and trade name to entrepreneurs who want to open their own business. The franchisee is the entrepreneur who enters into an agreement with the franchisor to sell their products and services, but they handle the daily running of the new location.

Business Format Franchising, the most common type of franchising relationship, is when the franchisor not only provides the franchisee the license to use its trade name and sell its products and services, but also provides an entire operating system and direct support including site selection, training, operating manuals, quality control and brand standards.

Franchising is a broad term and there a lot of industries you can operate in as a franchisor or franchisee. Here are the 4 most profitable industries for franchisees.

4. Gasoline Stations with Convenience Stores

While not glamorous, gasoline stations with convenience stores are good money-makers and have also become a profitable industry for franchisees. Not only do you have the revenue from the gas pumps, but also from the store.
Wawa franchises with the gas station are popular in the Tristate area. To be really successful, choose s franchisor who puts a lot of effort into the convenience store side by helping you provide a variety of delicious food and every day necessities and by creating new products that will attract more customers.

3. Hotels

The hotel industry is another popular industry for franchisees. Between work trips, family vacations and romantic getaways, the need for hotels will never go away. To help themselves grow without having to put all the money and effort out themselves, many hotels are now offering franchising opportunities.

A hotel franchise has many areas for growth including in special services like spa packages, onsite restaurants and all-ages entertainment, and with offering more streamlined check-ins and check-outs for their guests’ convenience.

2. Real estate agents and brokers

The real estate industry is another area that is really booming making it prime for franchising. If you have always wanted to own your own real estate or brokerage office, but are new to the business and wanted extra support and guidance, then joining a real estate franchise is a smart investment.

Because it is more service-driven than product-driven, you don’t need a big office space which can help cut down on some of the initial costs. And by joining a real estate franchise instead of starting your own, you will have extra support and guidance to get your new business going in the right direction right from the start.

1. Fast Casual

Fast casual restaurants are basically restaurants that are a step above fast food restaurants because they offer fast service and convenience while still offering quality food and a more inviting sit-down area. Today, they are one of the fastest growing industries.

Why fast casual franchises like Shmagel’s Bagels are so popular is that they have shown that it is possible to franchise without forsaking the quality their brand is known for. With today’s advanced technologies, communication between franchisors and franchisees are so much better allowing franchisors to see in real time what is going on at their franchise unit so they can help when needed.

Fast casual franchises have also been very open to new ideas that can strengthen the brand. Revolutionary ideas are happening in everything from menu items and food prep to community partnerships.

One of the most popular fast casual franchises today is Shmagel’s Bagels in Ocean City, Maryland. They have two locations in Ocean City and are looking to expand. Shmagel’s Bagels is known for its fun and creative bagel creations that are baked daily. Besides offering the most delicious breakfast and lunch foods and snacks possible, they are dedicated to providing the best customer service.

Bagel franchises like Shmagel’s Bagels are perfect for new business owners because bagel franchise cost is generally less than the cost of other fast casual franchises. There is less overhead because you can set up shop in a smaller space and you will need less inventory than a full service restaurant. Also the cost of bagels is more manageable. How much does it cost to make a bagel? Well, it varies a little depending on the type of yeast and other ingredients you use, but it will typically run you less than a dollar per bagel.

For more information about Shmagel’s and how franchises make money, call or send us a message today.

Bagel Shop Franchising

2 responses to “How Franchises Make Money & The Most Profitable Industries for Franchises”

  1. Fredro says:

    Nice post!

  2. Sunpreet chadha says:

    Need more information

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