Starting a business from scratch is full of challenges and it takes hard work to pull it off.
We don’t mean to make you downhearted but a quick look at the stats will help to understand how risky it would be to invest in a small business without giving much thought to the obstacles in the path of its success.
Given the data from the Bureau of Labor Statistics, which show 20 percent of American small businesses fail in their first year and this figure rises to 50 percent and 70 percent in the 5th and 10th year, respectively, buying a franchise of an already successful business seems to be a wiser choice than establishing your own brand.
This way, you would at least skip the marketing and advertising costs.
In this article, we are going to take a look at some of the most profitable franchises in America that are worth investing in.
10 most profitable franchises in the United States
1. Chick-fil-A
With some 2,400 locations, Chick-fil-A is one of the largest fast food chains in America, though not having as many stores as other big names like McDonald’s and Subway in the same industry.
With almost all of the stores operating inside the United States (except for one in Canada and one in the UK), Chick-fil-A is the most profitable fast food franchise in the United States.
While the overall annual revenue of 5.7 billion dollars is way lower than that of the giant burger chain McDonald’s, the average revenue generated by one Chick-fil-A join is bigger than that of a store of any other fast-food franchise in the US.
The interesting fact is that Chick-fil-A locations are making this huge profit in 6 days (they are closed on Sundays) while others have the whole week to make money.
2. McDonald’s
McDonald’s probably has made it to every list of the top-grossing fast food franchises so far.
The more than 35,000 McDonald’s stores worldwide — around 14000 of which located in the US — have generated a total of approximately $23 billion in revenue last year.
In fact, they have never brought in less than $20 billion in revenue for the company since 2005.
This means that a McDonald’s franchise can be a profitable business given the stability the company had in recent years.
Opening a McDonald’s location requires that you have at least $750,000 in liquid assets and make an investment of $1 million to $2.2 million.
You have to pay a franchise fee of $45,000.
3. Burger King
Enjoying more than 7,000 fast food restaurants distributed across the US and another 1,000 outside of the country, Burger King is one of the biggest burger fast food chains in the world.
With a franchise fee of $50,000 and a required investment of $300,000, BK is an affordable option for those seeking to buy a franchise in the fast food industry.
You’ll need to have the general business knowledge and past fast food experience to be a Burger King franchisee.
The 70-day training course BK offers to its new-comers will be enough to learn the necessary technical and managerial skills to own one of the most profitable fast food franchises.
4. Pizza Hut
As the world’s largest pizza chain in terms of the number of locations, Pizza Hut is one of the top-grossing fast franchises in America.
Buying a Pizza Hut franchise needs a budget of between $1.3 million and $3 million, a net worth of $1 million, and $360,000 in liquid assets.
The franchise fee of Pizza Hut is $25,000, the royalty fee is 6 percent of the gross sales, and the advertising fee is 2.5 to 3 percent of gross sales.
5. KFC
With more than 22,000 restaurants in more than 140 countries, Kentucky Fried Chicken (KFC) is a big name among the world’s fast-food chains.
The widespread popularity of KFC restaurants means that operating a KFC franchise can be a profitable business if you do it the right way.
If you have a net worth of $1.5-2.5 million and least $750,000 in liquid assets, consider becoming a KFC franchisee and earn money.
You’ll need to pay $45,000 for the franchise fee and then 5.5 percent of your gross sales will also go to the company.
6. Taco Bell
Although the $1.17 million to $2.6 million initial investment needed for opening a Taco Bell is too much for many entrepreneurs, it will probably worth it.
Taco Bell is one of the most profitable fast food franchises in the US, which requires applicants to have a net worth of $1.5 million and liquid assets of $750,000.
The franchise fee is between $70,000 and $95,000 depending on the type and the location of the store.
On average, a Taco Bell join makes between $80,000 and $100,000 a year, which persuades many Taco Bell owners to buy additional stores to multiply their earning.
One downside of the Taco Bell franchise is that you should have past experience in restaurant management to have a good chance to be accepted by the company to do business with them.
7. Jimmy John’s
One of the fastest-growing fast food franchises in the US, Jimmy John’s required initial investment is $444, which is more affordable than other franchises of the same type.
If you are ready to become a JJ’s franchisee you should know that the royalty fee is 6 percent of the gross sales and the ad and development fee is currently 4.5 percent.
Also the initial franchise fee for one such top-grossing fast food brand is $30,000 to $35,000.
8. Hampton by Hilton Hotels
Not all profitable franchises are in the fast-food industry.
Hampton by Hilton hotels is a lucrative hotel franchise in the US that offers a great business opportunity for those who can make an initial investment of between $7 million and $18 million.
Apart from that, you’ll need to pay a franchise fee of $75,000 to buy a franchise of a Hampton by Hilton hotel and then pay 6% and 4% of your gross sales for royalty and advertising fees, respectively.
9. One Hour Air Conditioning & Heating
This one is for those with a limited budget.
As perhaps the most profitable air conditioning and heating maintenance franchise in the US, One Hour Air Conditioning & Heating requires just $88k as the initial investment to sell you a franchise.
The service-providing company has over 300 locations offering heating and air conditioning maintenance services to people across the United States and is looking to expand its network.
10. Orangetheory Fitness
Having a fit body is an ever-increasing trend, thanks to social media that allows people to share photos of themselves with friends and followers on a daily basis.
This makes the booming fitness industry a great choice to invest in. Orangetheory Fitness is a relatively young gym franchise headquartered in Boca Raton, Florida, offering workout classes in specialized studios.
As of October 2019, Orangetheory Fitness had a total of 1300 locations worldwide, 1150 of them in the US and the majority of them franchise-owned.
To run an Orangetheory Fitness business, you’ll need to make an initial investment of between $563,529 and $999,121, including the initial franchise fee of $59,950.
The royalty fee is 8 percent of the gross sales and the brand fund contribution fee is currently 2 percent of gross sales, which may be raised to 3 percent later.
Conclusion
Here was our list of some of the most profitable franchises in America.
However, before making such big investments you should do more research to minimize the risk of business failure and maximize the ROI.
Also, keep in mind that the best franchise to choose for purchase depends on a lot of factors, including the market and reputation of the brand in the territory you want to open the franchise, your skills, experience, and expertise, as well as economic factors.
