What is the most profitable franchise
Which Franchise Really Works? Franchising in Russia: the most profitable and successful franchises with minimal investment. Why a franchise company is more profitable than a startup
Most Popular Franchises - 9 of the most popular and established companies to join.
Franchising came to the territory of Russia and Ukraine relatively recently.
Some entrepreneurs are cautious in this type of business as at times the size of the initial investment can be impressive.
But you know when choosing most popular franchise companiesyou can quickly amortize your investment.
What is a franchise?
First, let's break down the concept of "franchise" as well as some related terms.
Franchise - an agreement concluded between the franchisor (owner of the brand) and franchisee (those who want to start a collaboration) regarding the publication of products or services under that brand.
Simply put, this is the use of a lease mark.
Both parties benefit from this type of cooperation:
- the franchisor expands the scope of its activities and makes a profit.
- the franchisee saves time training and promoting the business, receives clear instructions on how, and ultimately an advertised brand is in their hands that their customers have instantly.
When an agreement is made between the parties, concepts appear in it, the meaning of which you need to know:
- royalties are payments for the use of the brand and the help of the franchisor. can be represented as a percentage of financial turnover, as a percentage of margin, as a fixed payment;
- lump sum payment is a one-time payment for joining the franchise network.
Most Popular Food Service Franchises
# 1. Subway
This company is a leader in fast food restaurants.
It was founded in 1965.
Metro restaurants can be found in 112 countries around the world, and Russia has more than 670 of them, the first of which opened in 2004.
The popular Subway franchise offers healthy fast food.
Here you will find fresh vegetables, meat, rolls, salads, desserts and drinks.
The restaurant's specialty is sandwiches, the filling you can choose, as well as bread that is baked every 4 hours.
If you want to become a member of this particular network, you should know the cost of the franchise provided:
# 2. McDonaldsIf you ask someone, “What are the most popular franchises you know?” Then everyone will definitely call McDonald's.
This is a fast food classic that probably everyone on the planet knows about.
In terms of the number of restaurants in the world, the company ranks second after Subway.
A selection of popular franchises in different countries may be different, but it is still represented by sandwiches, hamburgers, fries, various drinks and desserts.
When we talk about working with McDonalds in Russia and Ukraine, everything is complicated here.
The company only recently started operating in these countries.
Rosinter is a franchise company in Russia.
To become a McDonald's franchisee, you have to work hard.
First of all, you need to have an impressive amount of money at your disposal and then complete long and intensive training on the technological process and marketing strategy.
Number 3. Chocolate girlContinuing the theme of the most popular franchises, special attention should be paid to domestic businesses.
A striking example is the Shokoladnitsa coffee shop chain.
Most of the coffee houses, namely 200 "chocolate nits", are located in Moscow and the Moscow region, but they also operate successfully in the regions of the country, as well as in Ukraine, Kazakhstan and Azerbaijan.
There are 85 franchise branches.
The cafe offers delicious grain coffee, elite tea, other drinks and delicious desserts.
"Shokoladnitsa" also have a unique and cozy design.
The company attaches great importance to staff training.
For this purpose, a training center is operated in which courses are held by qualified trainers and psychologists.
The most popular franchises in commerce
Number 4. ZARA
This is a company that designs and sews women's, men's and children's clothing and accessories.
The stores of this network are present in 70 countries around the world and their number exceeds a thousand.
They started working on a franchise in 1988 to expand the market.
It is noteworthy that there is no flat fee to join the network, but there are what are known as "franchise costs" that are essentially the same.
It is also worth noting that the condition of buying the first batch for a certain amount.
You can become a monopoly in your city or region for a fee.
To join the popular ZARA franchise, you need to spend the following amounts of money:
|Type of attachment||quantity|
|Lump sum payment||is absent|
|Investments||40 000 $|
|Franchise costs for opening a brick-and-mortar store||30 000 $|
|Franchise costs for opening an online shop||8 000 - 10 000 $|
|Purchase price of the first batch for a brick and mortar store||30 000 $|
|Purchase price of the first batch for an online shop||10 000 $|
|Employee training and turnkey opening of a boutique||10 000 $|
|City monopoly||90 000 $|
|Monopoly on the region||150 000 $|
|Royal house||is absent|
No. 5. IKEAIt is the largest Swedish company for the manufacture and sale of furniture and housewares.
In Russia, this network is independently represented, and in Ukraine there are no stores at all.
IKEA has been on the market since 1943 and has of course earned the trust of customers for such a long service life.
Most of the stores are in Europe, in Russia it functions as its own sales network.
The company offers a franchise where it cannot enter the market itself.
It is quite difficult to become a franchisee of a company.
In addition to large cash investments, which are determined individually by those who wish to join, you must have at least 15 years of successful management experience.
No. 6. Fixed priceOne of the most popular franchises in Russia is a chain store specializing in food and non-food products - fixed price.
The format of such a trade is that a single fixed price is set for everything.
Here you can buy:
- costume jewelry;
- household products;
- household chemicals;
Today there are more than 2,000 stores in Russia.
And to join them, in addition to financial obligations, you need to have premises with an area of 250 square meters. m.
It's also worth noting that the settlement this popular franchise is located in must be home to at least 25,000 people.
The most popular service franchises
No. 7. Post boxes
This is an American company that deals with express delivery of correspondence and goods.
For this purpose, Mailboxes again works with 9 worldwide delivery services.
You can also print documents and promotional materials.
The network is represented in 70 countries and entered the Russian market in 2010.
After opening its own branch, 94 centers have already been opened as part of the franchise.
To become a franchisee, in addition to financing, you must have sales experience.
In addition, the future franchise participant must personally work in an open department for the first year and, after confirmation, complete special training in Moscow.
No. 8. GeneticTestThe work of this company can be called a popular novelty in the market without evidence.
GeneticTest is a unique technology that allows you to learn about a person's skills using a fingerprint.
The franchise company started operating in 2012 and received the award for the best innovative project in 2013.
Years of research have led to the creation of a hardware and software complex that uses a fingerprint scanner to determine what skills a person has.
It helps with self development and self-discovery.
The creators claim that the profit of a verified person is 1000 rubles, so it is possible to recoup an investment in a popular franchise by taking care of 50 customers.
No. 9. INVITROThis is an independent laboratory that is the largest in the CIS.
It offers medical services in the form of more than 1000 types of examinations.
Since 2006, more than 300 franchise members have opened.
All rooms are equipped with special equipment.
The collected analyzes are sent to Moscow for investigation.
The franchisee must choose a suitable space, necessary requirements, and also employ a staff of 5 people.
Since this area is medical-related, head office representatives conduct inspections of the franchisee several times a year.
Watch this video to choose a service franchise:
Thereon most popular franchise companies do not end.
This was just a short list.
But remember, even the most popular franchise doesn't guarantee 100 percent success.
Much depends on the franchisee himself, on his business skills, his leadership and compliance with all the rules.
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The section presents inexpensive franchises with investments up to 500,000 rubles. The payback period for most of them is a maximum of 6 months. The profitability of such a business may not be very high, it is equal to the size of the initial cost. However, this is the really handy option that works best:
- for the accumulation of initial capital for the subsequent transition to more profitable business models, but with a high entry threshold;
- for start-ups for inexperienced business people because it allows them to gain the necessary experience and connections to get used to the business environment without the risk of major losses;
- for those who do not plan to enter a highly competitive market but expect a small stable income, for example at the beginning of the retirement age.
What to Look For When Choosing a Franchise
You shouldn't just focus on the lump sum cost and payback period. It is advisable to analyze the following:
- the shape, the volume of the entrance fee - too high an entrance price, especially with low royalties, suggests that the company is interested in making a high income from the sale of the franchise and does not care much about the partner's future .
- what is the composition of the franchise package? It should be fully reflected in the contract, with all the details and restrictions imposed. clearly defined areas of responsibility;
- from which the amount of the regular payments is calculated - from the profit or from the sales proceeds; The latter option is usually more expensive for a budding entrepreneur.
- what guarantees are given regarding the exclusivity of the business in the region? It will hardly suit you if a few neighbors, inspired by your example, open vacancies 500 meters from the store.
- the amount of support received from the franchisor - the number and completeness of training seminars, training and incentive systems, marketing programs for franchisees; Automation equipment;
- assigning a personal manager-advisor to newcomers - communication with a person is easier and more efficient, communication is more efficient, problems that arise are resolved more quickly;
- the history of the seller's relationship with already working partners - it is advisable to get their opinion "live", not just reading reviews on the Internet;
- the number of franchise branches closed during operating hours - this information is of course not provided directly. However, you can use indirect data: on regional websites, mall data, location maps.
Why a franchise company is more profitable than a startup
Franchising as a way to start a business from scratch is growing in popularity. Market experts and entrepreneurs with rare unanimity consider this direction to be the most promising. The risk of bankruptcy for a franchisee is significantly lower than for any other small business. According to IFA (International Association): Of 100% of newly opened companies, 85% are closed within 5 years; opened as part of franchising - 14%. Buying a franchise for an aspiring entrepreneur seems like a perfectly sensible and justified move.
Look, Compare, and Choose Inexpensive Small Business Franchise Companies. Perhaps you will find a profitable company for yourself here.
Setting up a franchise company means entering the market under a foreign brand that the consumer already knows. The main benefit of a franchise is that you get a "turnkey business" and avoid many of the risks associated with starting a business from scratch.
Another obvious plus is that despite the economic crisis, the scope of franchising in Russia is increasing. In 2016, according to General Director magazine, around 1,400 franchise companies were active on the Russian market: 10% more than in the previous year.
Which Franchise Should You Buy?
Today the most profitable franchises operate in the hospitality and retail sectors.
The most famous franchise chains in public catering: Baskin Robins, Dodo Pizza, "Subway" and "Stardogs." The payback period for such a company varies between 9 months and 1.5 years.
The world's largest fast food chain Subway has opened 644 companies in 141 cities in Russia. The franchise is growing rapidly because opening a subway point requires a minimum of resources: there is no hot shop in the restaurants, so they are introduced economically and quickly.
In contrast, clothing, shoe, and perfume stores are less profitable. Given the crisis and the need for large investments, the demand for opening such a store has decreased. However, things are going well in narrower market segments such as fixed-price stores or express pharmacies.
The fastest growing retail franchise in 2016 was the fixed price chain, with 2050 companies in 723 cities of Russia (but when we talk about franchises, Fix Price only has 250). The reason for the popularity of the franchise lies in its low cost: 300 thousand rubles. Another advantage is the company's narrow niche: in the area of the sale of goods at a fixed price, the fixed price is a monopoly in Russia.
What help can a partner expect from a franchisor?
The franchisor's help can be expressed in consultations, staff training, equipment deliveries and promotional support. The list can be much longer depending on the line of business and the parameters of a particular transaction. For example, in sales, as a rule, the founder helps the franchisee choose a retail store, equipment and staff training.
For example, the ice cream chain 33 Penguins helps the franchisee choose the location of the point of sale, gives recommendations on window dressing and selection of equipment for electrical outlets, and helps train staff. The company also helps determine the profitability of the business.
If we talk about the globe gastronomy, then the help of the founder can go beyond the simple choice of premises. For example, the pizza chain Dodo Pizza opened an entire school for franchisees and developed its own software Dodo Is, which made it possible to optimize the work of 93 partners in 71 cities in Russia.
What do the numbers say?
Despite the attractiveness of some offers in the franchise market, it is important to understand that where you pay little, you earn the same. For example, opening a branch of the popular Shokoladnitsa coffee shop will cost 12.5 million rubles for an annual income of 6.5 million rubles. This means that the cafe will only pay off in 2-3 years.
There are franchises where less money is required to enter the country and the profit in the first year of operation covers the initial costs.On paper, the benefits look enticing in numbers, but they don't always come true.
The franchise start-up cost, along with major costs like renting a retail space and hiring staff, includes a flat fee - a one-time payment that the founder charges the franchisee for using the brand. The following table shows the primary spending versus income ratio of popular franchises in the market.
|scope of application||Companies||Initial investment||Revenue for the year||Annual surplus|
|hotel||Holiday Inn||315 000 000|
|Marriott||315 000 000|
|Hilton||315 000 000|
|Hypermarkets||Carrefour||315 000 000|
|crossing||7 000 000||70 300 000||6 000 000|
|Public catering||Pyaterochka||15 000 000|
|Plantain||94 500 000|
|KFC||157 500 000|
|MC Donalds||75 600 000|
|Burger King||2 700 000||28 000 000||1 200 000|
|Cinnabon||5 300 000||22 800 000||6 400 000|
|Papa Jones||12 000 000|
|Chocolate girl||12 500 000||38 400 000||6 500 000|
|Travel coffee||14 000 000||27 600 000||5 500 000|
|Clothing trade||Oji||11 600 000||39 000 000||5 000 000|
|In the city||4 500 000||33 000 000||5 000 000|
|Sela||4 700 000||20 000 000||5 000 000|
|Mascotte||750 000||24 000 000||3 600 000|
|Glenfield||2 500 000||18 000 000||2 000 000|
|Westland||2 500 000||12 000 000||2 300 000|
|Tom Schneider||10 000 000||18 000 000||2 000 000|
|Tom far||4 500 000||36 000 000||2 800 000|
|Finn torch||2 500 000||15 000 000||3 000 000|
|Sports shop||Gold's Gym||63 000 000|
|domestic appliances||Positronic||5 800 000||60 000 000||6 000 000|
Many clothing and footwear retailers, such as InCity, Sela, and Finn Flare, are offering a low entry fee due to the crisis. The entry threshold has been lowered as the popularity of such franchises has fallen: people spend less money on new things. Before buying such a franchise in a crisis, it is better to calculate all the risks.
So is it worth running a franchise business?
Experts and entrepreneurs interviewed “The General Manager”, believe that yes. In 2014 they even included franchising in the top 20 promising business areas in Russia for the next 3-5 years.
However, do not think that running a franchise is easy money. Although the franchisor helps, 99% of the project's success depends on the honest work of the partner. In my experience, it will take an average of two to four years for someone to prevail without anyone guaranteeing your success.
The good news is that after working for a franchise company, new entrepreneurs usually learn the basics of business and after a while, start their own business. If you have such ambitions, then the franchise business is a great school.
- Calculate in advance how much you are willing to invest in the business without considering the flat rate.
- Do some research on the company selling the franchise (small initial investment and large revenue should be in your doubt).
- Decide on the niche in which you want to buy a franchise. You should have at least a minimal idea of this business.
- Discuss in advance what the company will offer you: What support is provided for which you will charge an additional fee (sometimes this is not stated in the contract).
- A brand is not always a guarantee of success. Discuss with your partner what you will get besides the brand (technology, profitable terms with contractors, equipment);
- When you buy a code, make sure it is patented.
- Study the contract carefully: especially the sections on duties and penalties;
- Before paying, be sure to ask for a project start plan and who is responsible for each phase. You need to have a clear understanding of how to start the project after paying the franchise.
- When buying an overseas franchise, find out who will be locating the project.
When we talk about the most profitable franchises, it is worth noting that many of the franchises presented in the franchise market in 2018 are at the top of the best deals for a long time. Some of these franchisors have a much larger number of franchised businesses than their own branches.
The most profitable franchises in 2018 include franchises related to the creation and development of businesses in areas such as catering and clothing retail in the medical service, hairdressing and more. Business people interested in small and medium-sized businesses can take advantage of the offerings of domestic well-known companies as well as world-famous brands.
We draw your attention to a list of profitable franchises in 2018. These franchises work well for a wide variety of entrepreneurs. These franchises will help you start your own business with minimal labor costs. You can contact any franchisor from the list directly using the contact form.
List of profitable franchises in 2018
The franchise is a project to open a shisha club. The company, which offers the possibility of a franchise cooperation, has passed the certification process and is legally active. The companies opened as part of the Contrast franchise are characterized by high profitability. That is why this franchise can rightly be considered one of the most profitable.
The total amount of investment necessary to buy a franchise: 400 thousand rubles. The franchise agreement does not provide for license fees. Company representatives will help choose a location to open a club. Personnel training is offered. The minimum payback period for the project is five months.
CoffeSpace Coffee Shop Franchise
This lucrative franchise is an offer from a company that specializes in the coffee business ... The number of fans of the brand is estimated to be tens of thousands today. Success depends on a number of factors including what are known as provocative design decisions.
The investments for the creation of the company amount to 300,000 rubles. There is no license fee included in the franchise agreement. The minimum amount of a push deposit is 179 thousand rubles. There is no license fee included in the terms of the contract. The area for the opening of a coffee shop is selected with the help of the company's specialists. Universities, shopping and business centers are preferred. The minimum repayment period for the investments made is three months.
Artel children's clothing brand store franchise
The company, which launched the Artel franchise in the Russian franchise market in 2016, sells high quality, practical and fashionable clothes for children. This franchise is considered by many experts as one of the most profitable as of 2018.
The franchisee has the option to use a full set of standards for document flow and bookkeeping of goods. Regular training and tests are carried out for the staff. The volume of investment for the acquisition of a franchise is 800 thousand rubles. Annual license fee - 25 thousand rubles per year. There is no flat-rate contribution included in the terms of the contract. Required space: 60 - 100 square meters. The period in which the investment pays off: from five months to one and a half years.Send your request directly to the Artel franchisor now!
More options for profitable franchises
Below we've selected a few profitable franchise companies that might interest you. Please read them.
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