When you want to start a business, many of your friends advise you to take up a franchise. The definition of a franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business’s (franchisor) proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business’s name. In exchange for gaining the franchise, the franchisee usually pays the franchisor an initial start-up and annual licensing fees.
As an example, big business brands like McDonald’s, Taco Bell, Dairy Queen, Denny’s, Jimmy John’s Gourmet Sandwiches, and Dunkin’ Donuts give franchise of their brand to increase its market share or increase its geographical reach at a low cost. When someone buys franchise of these brands it is a joint venture between both parties. The franchisor is thus the original or existing business that sells the right to use its name and idea and the franchisee is the individual who buys into the original company by purchasing the right to sell the franchisor’s goods or services under the existing business model and trademark.
Franchises are a very popular method for people to start a business, especially for those who wish to operate in a highly competitive industry like the fast-food industry. One of the biggest advantages of purchasing a franchise is that you have access to an established company’s brand name, meaning that you do not need to spend further resources to get your name and product out to customers.
If you are looking for franchises in 2020 to start a business then here are the 11 best ones to buy.
1. My Gym Children’s Fitness Center
My Gym Children’s Fitness Center is a worldwide fitness center oriented towards children between the ages of 6 weeks to 13 years. The company was formed in 1983 by Yacov and Susi Sherman, who opened the gym to promote children’s health and fitness as well as social skills. With over 550 units worldwide, My Gym offers fitness programs, including classes, birthday parties, summer camps, and community events, for children ages three months to nine years old. My Gym programs include movement, tumbling, and exercise.
For standard centre
- Franchise fee: $55,000
- Total Initial Investment: $168,400 – $249,700
- Royalty: 7%
- Marketing Fund: 1%
For compact centre
- Franchise fee: $25,000
- Total Initial Investment: $107,050 – $166,550
- Royalty: 8%
- Marketing Fund: 1%
For mobile model
- Franchise fee: $25,000
- Total Initial Investment: $36,750 – $79,250
- Royalty: $125/month for year one, $250/month for year two and beyond
- Marketing Fund: 1%
2. Kona Ice
Kona Ice is a mobile truck that sells flavored shaved ice based in Florence, Kentucky. The company was founded by Tony Lamb in 2007. It was named one of the fastest-growing franchises in the United States. The company’s mascot is an animated penguin named Kona.
As of March 2015, the company had more than 1000 franchise locations in 43 states and others across Canada. Customers can customize their shaved ice with the Flavorwave, a patented flavor dispenser built into the side of the truck. Kona Ice shaved ice contains 60 percent less sugar than regular sugar water snow cones and can be made of 100 percent fruit juice in participating locations.
Once signed up with the Kona Ice franchise, its equipment support staff is available 24/7. It also has a team of creative and marketing specialists to assist you, including designers, animators, marketers, and social media experts. Kona Ice also provides a three day, all expenses paid learning experience called “Kollege.”
- Franchise fee: $15,000
- Inventory pack: $5,500
- The truck: $102,650
Royalty fees: Royalty fees are as follows: $3,000 per year for the first five years; $3,500 per year for years six and seven; and $4,000 per year for years eight and up.
3. Plato’s Closet
Plato’s Closet is a clothing resale business specializing in trendy clothing. Its core customers are females age 12 to 24. Plato’s Closet is a great franchise to start because of the potential amount of inventory and industry it’s in. Americans are purchasing more clothing items than ever before and sell that clothing at a resale store. With over 480 locations across North America and new stores opening each month, their impact on customers, communities and the environment continues to grow as they reach millions of teen and twenty-something consumers. The brand is rapidly expanding, but there are still untapped markets across the US and Canada ripe for a new franchisee to establish its own Plato’s Closet.
Resale franchises’ cost will vary based on your location, inventory and an array of other factors. However, the startup costs to get your franchise up and running will generally be upwards of $250,000.
Specifically, the initial investment for Winmark resale franchise brands typically fall within the following ranges:
- Play It Again Sports – $275,000 – $375,000
- Once Upon A Child- $250,000 – $350,000
- Style Encore – $250,000 – $350,000
- Plato’s Closet – $250,000 – $350,000
- Music Go Round – $300,000 – $350,000
9Round is a kickboxing-based class fitness gym. The business also incorporates heart rate technology so that customers can track their level of exertion. 9Round is a great franchise to own because it is relatively low-cost, especially for fitness franchises.
9Round’s franchise fee is low, which means the franchise can become profitable more quickly than other fitness franchises. The overall investment for the franchise is lower as well because the equipment is not expensive and the classes can be done in a small environment. The fitness industry also continues to grow.
9Round’s has two ownership models; Semi-Absentee Owner and Owner Operator. Total average owner investment is between $99,675 – $143,075 with $30,000 franchise fees.
5. Great Clips
Great Clips is a hair salon franchise with over 4,100 locations across the United States and Canada. It is headquartered in Minneapolis, Minnesota. In 2013, it had system-wide sales of $1.03 billion. In early 1983, founders Steve Lemmon and David Rubenzer sought out a third partner in Ray Barton to spearhead Great Clips’ expansion and franchising. Great Clips, Inc. has over 4,400 salons in North America. What makes Great Clips a great franchise to buy into is the relatively low-cost investment. If you’re in a smaller market, you can open a location for under $150,000.
6. Dunkin’ Donuts
Dunkin’, also known as Dunkin’ Donuts, is an American multinational coffee/donut company and quick-service restaurant. It was founded by William Rosenberg in Quincy, Massachusetts in 1950. The chain was acquired by Baskin-Robbins’ holding company Allied Domecq in 1990; its acquisition of the Mister Donut chain and the conversion of that chain to Dunkin’ Donuts facilitated the brand’s growth in North America that year. Dunkin’ Donuts and Baskin-Robbins have been subsidiaries of Dunkin’ Brands, headquartered in Canton, Massachusetts, since 2004. The chain began rebranding as a “beverage-led company”, and was renamed Dunkin’, in January 2019.
With nearly 12,000 locations in 36 countries, Dunkin’ is one of the largest coffee and baked goods chains in the world. Its products include donuts, bagels, other baked goods, and a variety of hot and iced beverages. For franchise fees click here.
7. Cruise Planners
Cruise Planners is a privately owned American Travel Agency franchise network. The company is headquartered in downtown Coral Springs, Florida. The company’s travel agency franchisees specialize in booking cruises/travel to destinations around the world. The company has more than 2,500 franchise owners in all 50 states.
The company is a licensed travel agency, an American Express Travel Representative, and a member of CLIA (Cruise Lines International Association) NACOA (National Association Of Cruise Oriented Agencies), and ASTA (American Society of Travel Agents).
Cruise Planners is one of the lowest cost franchises to open priced initial franchise fee is $10,995.
8. Fast Signs
Fastsigns International Inc. (trademarked in all-capitals as FASTSIGNS) is the franchisor of Fastsigns centers which provide custom sign and graphics products. There are currently over 700 Fastsigns locations worldwide in United States, Canada, the U.K., the Cayman Islands, Mexico, Saudi Arabia, the UAE, Chile and Australia (where centers operate under the name Signwave).
The initial franchise fee is $49,750
There is a 6% royalty based on monthly gross sales. In addition, there is a 2% National Advertising Fund fee, also based on monthly gross sales. They reduce these fees by 50% for the first year of operation for all new centers, conversions, and Co-Brands to help you ramp up the business.
9. CPR Cell Phone Repair
CPR Cell Phone Repair is a retail store that repairs consumer electronics such as smartphones, tablets, and computers. It is the nation’s oldest and largest mobile repair franchise. What makes CPR a great franchise to own is the in-demand industry it’s in. As more people own smartphones and tablets, they will also break them, and need assistance with repairs. CPR has more than doubled its franchise size in the past three years by adding more than 300 new franchises.
- Initial franchise fee: $25,000
- Ongoing royalty fee: 8.5
10. Kumon Math & Reading Center
Kumon (Kumon Educational Japan Co. Ltd.) is an educational network created by Toru Kumon which uses his Kumon Method to teach mathematics and reading for young students. It is an after school tutoring franchise that specializes in math and reading. It is the only franchise on this list with more international than US locations with more than 24,000 locations around the world. Kumon is a great franchise because of the very low franchise fee of $1,000. Additionally, Kumon will pay for several first year costs (up to $36,000), such as 50% of rent, signage reimbursement, furniture, fixtures, paint, carpet, and window coverings.
- Initial franchise fee: $1,000
- Ongoing royalty fee: $34 – $38/month per student
11. Merry Maids
Merry Maids is an international franchisor that sells and supports residential cleaning services franchises throughout the United States, Canada and the United Kingdom.[ Merry Maids was founded in 1979, and joined with ServiceMaster in 1988. In 2007, the company had over 8,000 employees. Merry Maids has 1,400 independently owned and operated franchises worldwide. It is a subsidiary of ServiceMaster.
Merry Maids is a top franchise because it offers 80% financing on the initial franchise fee. Additionally, Merry Maids is a lower-cost franchise that can be operated out of a home. New owners get to travel to Memphis, Tennessee, for two weeks of training; one of the longest franchise training periods on this list.
- Initial franchise fee: $37,500 – $51,500
- Ongoing royalty fee: 6% – 10%
There are lots of other franchise businesses to go for. Note that the best franchises offer low-cost, have low failure rates, are easy to learn, including quality training, and brand strength. The best franchises for new business owners are those they can start small and grow big.