Finding the Right Opportunity: Types of Businesses Related to Franchising

There are two major initial steps to becoming a franchisee: Deciding to become a franchisee and landing on the right brand within the right category.

There are several questions you should ask yourself when figuring out what brand makes most sense for you:

What have you been passionate about in your career?

What type of category do you feel you can pour your heart into?

What type of brand category do you believe has sustainability and longevity (at least for the next 10 years)?

How much investment do you have to put toward this opportunity and how much investment do you have for working capital?

“Every year, more and more franchises are created. This means more opportunities for would-be buyers,”  said Nick Powills, chief strategist at No Limit Agency*. “The challenge for would-be buyers is finding their ideal fit for their brand. My recommendation is picking a category you are passionate about – could be pets, wings, or cleaning. Then, identify as many brand as possible in that category. Then, pool them into established brand and emerging brand. This way, you can explore a few different brands within the space and at different size. You are going to want to open where you want to open, so, finding the opportunity that matches your passions and your requirements is critical.”

By figuring out some necessary answers, you can begin to identify the right category of franchise for you. According to the fourth edition of Andrew J. Sherman’s Franchising & Licensing, there are six main categories of businesses related to franchises:

1. Home-based businesses
2. Sales and distributors that are product driven
3. Retail store where business formats are emphasized
4. Management-driven, multi-unit concepts that stress large territories or regions
5. Satellite carts and kiosks
6. Financial investments and large-scale projects

The International Franchise Association (IFA) breaks franchises down by industry, with the major ones as follows:

• Automotive
• Business Services
• Commercial and Residential Services
• Education
• Lodging
• Personal Services
• Quick Service Restaurants (fast food)
• Real Estate
• Retail Food
• Retail Products and Services
• Senior Care and Medical Services
• Table/Full Service Restaurants

“It’s important to know what type of business owner you want to be.  Do you want to be an owner-operator, where you work in the business on a day to day basis?  Do you want to be an absentee owner, where you hire someone to run the business for you and you manage it from a higher level?” said Scott Oaks, Vice President of 1851 Franchise. “Most franchisors know what type of owner they need in their model to be successful. This will be another filter to help you through all of the opportunities that are out there.”

To help guide you toward your right opportunity, visit the brand section on 1851 here.