The best franchise opportunities to pursue in 2024

For many years franchises have been popular, profitable investments, and that continues to be true in 2024. Whether you’re new to investing in franchises or a seasoned trader, you’re undoubtedly interested in the best franchise opportunities to pursue in the coming year. Read on for more information and find the right picks for you and for your portfolio.

In this article, you’ll learn: 

• What makes a great franchise
• Why franchises make such good investments
• The best franchise opportunities to pursue in 2024

We’ll start by looking at the qualities that set great franchises apart from the rest.

What makes a great franchise?

To pick the best franchises, several factors need to be evaluated. For example, savvy franchise investors look for options with: 

• A proven business model
• Growth potential
• Support for franchisees 

Let’s look at each of these qualities in closer detail:

Proven business model

A proven business model sounds like table stakes for franchises – after all, if your business model hasn’t been successful, it makes no sense to franchise out. The business environment changes, and how companies do business has to adapt. And along with a proven business model, looking at that franchise’s business systems and how they can respond to market pressure is equally important.

For positive market pressure, you want to ensure this franchise can grow as demand grows. Examine its operations, its inventory, its EBITDA, and cash reserves. Take a look at how many new locations have been opened in the previous three years and how new franchisees are recruited and trained. Some, possibly most of this information can be found in the franchise disclosure document (FDD), which is always a good place to begin your research. 

For negative market pressure, like the appearance of a competitor that steals market share, look to leadership and how your selected franchise responded to outside factors. Most franchises have identified a niche addressable market and are well aware of their competition. Look at how they stack up against the competition in popular opinion polls, through earnings reports, and even by tracking their stock price over the years.

Growth potential

How much has this franchise been growing? While historical data (like the number of new locations opened in the past three to five years) is important for predicting future growth, you should also look at the broader market.

Quick example: Restaurant Dive reports that the quick-service restaurant (QSR) market is projected to be the second fastest-growing franchising industry in 2024. So a franchise not in that sector but growing faster than that group’s average probably has excellent growth potential.

Franchisee support

The best franchises set their franchisees up for success, and training is a great indicator. Strong franchises prepare franchisees with comprehensive training in advance of opening a first location. They also offer support during the critical first months of business.

One way to gauge the level of support a franchisee gets from the franchisor is to look at the number of location closures or sales over the past few years. If there have been no closures or sales, great! But if there have been, try to find out why.

Benefits of franchise businesses

Franchises can have the potential to be some of the best investments because they grow quickly. In February 2024, Franchise Times reported that franchising grew in every economic metric that matters in 2023. All signs indicate this momentum continuing into 2024, especially in the southern United States.

Franchising is growing: In October 2023, Yahoo! Finance reported that the global franchise market is expected to grow more than $1.6 trillion ($1,634.71B) between 2022 and 2027, with food and hospitality leading the way. This massive growth potential makes the franchise sector appealing from an investment perspective.

Franchises are stable: A January 2023 study published in the Journal of the Academy of Marketing Science found that franchise buybacks and franchising announcements had essentially the same (positive) impact on a franchise’s share price. Even if franchises toggle their distribution strategies between corporate ownership and franchising, market and investor confidence remains high.

Best franchise opportunities to pursue in 2024

Taking into consideration all the factors covered in this article, we’ve put together a list of our choices for the best franchise opportunities to pursue in 2024. Take a look at the following five selections.

SealMaster

SealMaster‘s incredible $7.1M average gross revenue makes it a standout franchise across all categories. With only 43 locations – in part due to large territories and dedicated franchisee training – this Sandusky, Ohio-headquartered franchise is definitely one to watch. SealMaster sells pavement products and equipment, like pavement sealers.

Fast facts

Locations: 43

Founded: 1969

Franchised: 1991

Average gross revenue (EBITDA): $7.1M

Startup cost: $580K–$925K

Franchising fee: $35K

Vital Care Infusion

Vital Care Infusion offers pharmaceutical infusion services to patients across 64 locations. The Brentwood, TN-headquartered franchise boasts a phenomenal $6.5M average gross revenue and has been franchising for nearly 40 years, showing controlled, intentional, safe growth.

Fast facts

Locations: 64

Founded: 1986

Franchised: 1986

Average gross revenue (EBITDA): $6.5M

Startup cost: $536K–$996K

Franchising fee: $50K

City Wide Facility Solutions

City Wide Facility Solutions tops this list with their $8.1M average gross revenue and explosive profitability. The company has been franchising since 2001 but has grown to over 80 locations across the United States. City Wide sells commercial cleaning, janitorial services, and most other facility maintenance services.

Fast facts

Locations: 84

Founded: 1961

Franchised: 2001

Average gross revenue (EBITDA): $8.1M

Startup cost: $179K-$380K

Franchising fee: $70K

The Boiling Crab

If you’ve had any doubt that restaurants can be profitable, The Boiling Crab will prove you wrong – with an average gross revenue that exceeds $7M. This highly profitable seafood restaurant has a mix of corporate-owned locations around the U.S. but franchises internationally, with locations in Shanghai, Saudi Arabia, and Australia.

Fast facts

Locations: 31

Founded: 2004

Franchised: 2013

Average gross revenue (EBITDA): $7.2M

Startup cost: $1.1M–$3.8M

Franchising fee: $40K

Closets by Design

Closets by Design designs, builds, and installs custom closets, garage cabinets, home offices, pantries, and more. With an average gross revenue of over $7M and 48 locations across the United States, this Whittier, California-headquartered company is highly profitable – and growing. 

Fast facts

Locations: 48

Founded: 1982

Franchised: 1998

Average gross revenue (EBITDA): $7.1M

Startup cost: $152K–$507K

Franchising fee: $20K

Invest fractionally in franchises with FranShares

Now that you know what makes a great franchise, you’re ready to explore the wider opportunity of franchise investment. Many investors who are interested in franchising choose passive fractional franchise investing with FranShares. Our unique approach offers healthy return potential and diversification in a passive investment model. We give retail and accredited investors access to all the benefits of franchising with low initial capital outlay.

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