What Are The Most Profitable Franchises To Own In 2012 ?

Unfortunately this is not an easy question to answer as the majority of franchise companies in the USA don’t generally provide public info about the profitability of their franchise concept. However, here are a few suggestions below that could be useful in getting some info on the potential profitability of a franchise business you may have an interest in starting up and owning in 2012.

Review The FDD: Although most franchisers in the USA don’t report earnings data or claims in their FDD (franchise disclosure document) its still worth the effort in my opinion to request (or buy a copy online if available) and review a copy of the most current FDD from any franchise opportunity you have a high level of interest in. Although the FDD may not include hard earnings claims they may provide other general financial info such as average sales per unit which can be helpful.

Interview Current Franchise Owners: This would be my preferred method of drilling down on the potential profitability of an established franchising concept. Current franchisees are in the trenches and can sometimes provide lots of interesting financial info and clues about how profitable a particular franchise can be.  In most cases as part of the disclosure process franchisers will give prospective buyers a list of current franchisees that they can contact to help validate their concept. This is a good start, but I would probably advise you try to also contact a few current franchisees that are not on the list to get a wider range of data and unbiased opinions. Another good sign in my opinion is franchisees who own multiple units of the same concept.

Research Industry Categories & Business Model: Its a fact of life that some franchise business categories offer products or services that have higher profit margins than others which obviously can affect profitability. For instance its a fairly well known fact that in the food or restaurant category pizza and coffee drinks can generally offer very high margins. You may also want to research franchise business models that have relatively low overheard expenses, don’t offer a generic type product, are well established, and have limited competition in the market. High growth categories such as senior care are also well worth researching for very profitable opportunities.