Our franchise

investing philosophy

FranShares only works with franchises that show net profits in their financial disclosures so our investors can have a better understanding of potential returns. We avoid franchises that have high buildout costs, employee headcounts, and inventory to maximize ROI.

We take a close look at each franchise’s growth per location, store sales, and number of franchisees to ensure the brand is growing quickly, efficiently, and sustainably.

We prioritize growing franchise brands that have high availability for multiple locations in good markets — not established, highly saturated franchises whose availability is limited to non-existent in good markets.

As part of FTC regulation, each franchisor’s leadership must be disclosed. We look for experienced teams based on their involvement in their franchise’s industry and in franchising as a whole.

While we may not always invest in the “sexiest” businesses, FranShares looks for those that are more essential services that have great long-term outlooks. We avoid quick fads and stick with staples like haircare, automotive, fitness, etc.

We conduct extensive competitor research on prospective franchises to determine if they have the advantages necessary to capture market share in their space.

Many franchises require a full-time owner and operator. We focus on semi-absentee franchise models that can be manager-run, which typically have lower employee headcounts and simpler operations. We also add an extra layer of management, which is typically not found in these franchise models to have top-of-the-line efficiency in operations.

Franchises are often service-based businesses, which are considered “recession-resistant.” The most resistant are those that fulfill customer needs: haircare, automotive services, home improvement, child-care and education, and healthcare are all good examples. If consumers absolutely can’t do without it, the investment is likely to perform well regardless of the economy.