How to Spot a Franchise with the Best ROI

As a savvy businessperson, you know that there’s truth to the adage “you have to spend money to make money.” A good business opportunity always requires an investment, in money as well as time and effort. Naturally, you want to get the most in return for what you put into any business venture, and franchising is no different. Let’s take a look at how to find the best return on investment franchise opportunity for you.

The Most Bang for Your Buck

For those who aren’t familiar, the term return on investment (ROI) refers to the comparison of the profit you receive from something in return for what you’ve invested into it. ROI is usually represented by a percentage, calculated by taking the profits/interest/dividends you get from something – be it shares in a company, stocks, or businesses you own – and dividing it by the initial investment you put into it. Calculating the ROI on financial investments like business shares is simple, since you just divide your interest earned by your initial investment. It becomes more complicated when calculating the ROI on a business you own and operate, since you also have to factor in things like any salary you give yourself via payroll.

As a businessperson seeking to open a franchise, you want to find a franchise with the best ROI possible. Franchising analysts say a good franchise ROI is approximately 10%-15% annually. This can vary somewhat between industries and franchise models. However, it’s important to remember that franchise ownership isn’t just a passive investment; there’s more to making the best ROI franchise investment possible than the financial investment. You play an active role in the success of your franchise, so the more effort you put into making sound business decisions and growing your franchise, the better your franchise’s ROI will be.

Signs of a Profitable Franchise

While looking for a franchise with the best ROI, there are important indicators to watch for. No matter what industry you’re looking to join, doing your research before signing on with a brand is vital.

One of the first signs of a profitable franchise is having an established brand with a good reputation, especially one for growth. One of the biggest assets a franchisor can offer their franchisees is a trusted brand name that will attract loyal customers and a reputation for a proven business concept and business model. For example, GrassRoots Turf has grown steadily since we began franchising in 2020. A reputation for solid, sustainable growth and a sound business model encourage company loyalty among franchisees, as well as positive testimony.

Another quality shared by the best ROI franchises is a good training program. Since your performance as a franchisee affects your success, a franchisor needs to provide you with the best possible training so you can get the most out of your franchise. Make sure when doing your research to find out how comprehensive the franchisor’s training program is and how much effort they take to provide ongoing training opportunities. GrassRoots Turf provides new franchisees with a two-week initial training program and 2-3 days of on-the-job training to start. Afterward, franchisees are given refresher training 1-2 times per year. This training covers everything from how to operate equipment to establishing our proven sales system.

Comprehensive market research is another important quality for a good franchise. A franchisor is responsible for supporting franchisees with services that help them run an efficient business. This often includes administrative services like human resources and large-scale marketing and advertising. Keep in mind, though, that franchisees may need to take some initiative to conduct local marketing research and advertising while leaving the national-level stuff to the franchisor. GrassRoots Turf provides franchisees with a variety of marketing services, including email marketing, regional and co-op advertising, and website development.

Finally, a good franchise will make use of the latest proven tech in its industry. Investing in technology is important for a franchise to maintain a competitive edge and to stay compatible with any outside, third-party service providers it requires to operate. At GrassRoots Turf, we train franchisees on the use of state-of-the-art tanker trucks as well as a GPS routing system to provide the best, most efficient routes to customers.

From Acorns to Oaks

When searching for a franchise with the best ROI, it’s important to remember there are many factors that go into a franchise’s profitability. Among the most important factors is market demand; no business can grow if nobody wants or needs its products or services. A franchise whose industry has a lot of demand is fertile ground for new franchise owners to grow their own market presence.

According to market analysts, GrassRoots Turf’s industry, the landscaping industry, reached a market value of $176.5 billion in the U.S. by 2023, with an average annual growth rate of 8.1% over the last five years.

Another factor for a franchise’s profitability is the franchisee’s passion for the work. Even if all the right elements are in place, a franchisee’s heart has to be in the product being made or the service being provided for them to have the drive to go out and make the most of it. Growing a business, whether solo or in a franchise, takes hard work and effort, and the ones that make the most will be the ones willing to go above and beyond. Experience and knowledge in the industry play into this. However, if a franchisee is motivated, they can gain the know-how through training and on-the-job experience.

Market competition is another important factor in profits. If your franchise is the only game in town for local customers to get what they provide, then you’ll have a corner on the market until some competing business opens its doors. Starting out in a market that’s already saturated with brands offering similar products or services makes it hard to get started when you have to fight for customers from the get-go.

However, you shouldn’t be completely averse to competition. A healthy amount of competition will keep you active and attentive to your customers’ needs and preferences, as well as looking for new ways to appeal to them while continuing to provide the quality products and services they expect. Some franchisees become complacent due to a lack of competition and rely too much on cornering the local market to guarantee their profits.

Plant Your Seeds for Success with GrassRoots Turf

We’re pleased and excited to offer you the opportunity to join the GrassRoots Turf franchise team. We’re a lawn care franchise with a unique franchise revenue model. While many lawn care franchises are seasonal businesses, our monthly billing system helps ensure you have a steady income stream to help your franchise grow. We also offer our franchisees exclusive territories.

We’re looking for franchisees with a drive to succeed, the ability to follow our proven business model, strong sales and customer service skills, strong time management skills, high personal standards, and the ability to meet our initial investment requirements. Contact us today to learn more about your franchising opportunity with GrassRoots Turf.

Posted in Starting a Franchise.

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