What Makes a Franchise Successful?

When you’re looking to become a franchise owner, you can’t just consider yourself. You’ve also got to consider the franchisor and how its business functions overall.


Judging whether or not any given franchisor is “successful” is quite often difficult, though. Of course, the franchisor will try to make you believe that it’s the best thing since sliced bread. But, is it really?

When you’re evaluating the success of a franchisor – and whether you’ll find success as a franchisee with that franchisor – these are the things you should be considering:

A Model That Makes Sense

As you might expect, it begins with the franchisor’s business itself. Here you’ll want to evaluate what that business’ value proposition is. Take Panera Bread, for instance. They provide customers with food that’s healthier – in theory at least – than a typical fast-food establishment with the same level of convenience. With any franchisor you’re examining, figure out their value proposition, and try to project how that will work out further on down the line.

Location, Location, Location

Where you set up a business is as equally important as what that business is and does. With the franchisor that you’re looking into, consider where they’re looking to expand. What is the market there like? Does the business model make sense for the market that the franchisor is attempting to penetrate?

Level of Market Saturation

Of course, not every franchisor will be expanding into new territory. Instead, they’ll be trying to double down on success that they’re already enjoying in a certain area. How does that look for you? Don’t just consider the immediate area you’re looking to operate in. Also consider how far the franchisor has penetrated the regional and national market. If, eventually, you’ll be looking to expand your franchise operations, this will have important consequences for that.

Operating Margins

This aspect is tremendously important, as it will have a direct effect on how profitable your franchise can become. Here you’ll want to consider the scale of the business. Those that are larger will necessarily be able to provide their franchisees with better operating margins. Further, one that exhibits a greater degree of control over the products that you will be selling will be able to provide those products at a cheaper cost, and thus you will be able to profit more.

The Most Important Ingredient: You

While you should avoid being personal in business, it’s important to remember that business is personal. It all begins with you. Only through thorough research will you be able to identify the franchisors and opportunities that are poised for the greatest degree of success. Once you’ve signed up, though, everything comes down to you.


That’s why doing all of this research and consideration from the start is so important. It places you in the right frame of mind to begin the entire franchise process. Ultimately, you’ll need to carry over this same attention to detail and willingness to learn in order to find your success as a franchisee.