Best Franchise to Open in 2023: how to make your choice?
How to make a smart choice when looking for an ideal franchise business fit for your local market? At Lolo, we thought, let’s research the best franchises to open in 2023 for our (potential) business partners.
We’ve read all the possible papers, checked the available datasets, and consulted our in-house experts for the low-cost franchise opportunities and the most profitable franchises. Here’re the research results for you to make the best choice! 🔥
Choosing the franchise business that’d work for you
According to the Franchise direct data, at the moment, the top franchises in the world are KFC, Mcdonald’s, 7-Eleven, Marriott International, and Burger King.
Food and hotels seem to take it all in the franchise business. However, don’t let this information mislead your choice if you want to start your own business today.
The hotel franchises require high investments. Besides, they are a fragile enterprise in these times, mostly because the tourism industry is becoming unpredictable since the climate-change-driven weather excesses and the aftereffects of the COVID pandemic.
The costs of scaling a food franchise are high, too, for instance, compared to a ride-hailing franchise business.
Also, consider that for developing countries such as Congo, Peru, or Bolivia, food and hospitality franchises often mean catering to tourists from the global North, which doesn’t necessarily mean any positive changes for the local economy and environment.
The best low-cost franchises provide services. Nice discovery based on the same dataset: the ‘trendiest’ franchises across the globe are services, too: think dog walking, healthcare and consultancy, moving, training & education—and, essentially, ride-hailing!
Long story short, if you’re considering low-cost franchises with high profits, services provision might be your best franchise choice.
Types of franchise businesses to choose from
There are three common types of franchise businesses in the market.
Product distribution
This type of franchise business requires the lowest investments. For instance, Pepsi and Tupperware, H&M, and New Balance work with this model.
Product distribution functions pretty simply: the franchisee just resells the franchiser’s products. For a product distribution franchise, you need to work out a business plan and set up all operations.
Franchises like this are very typical for retail and business-to-consumer sales of furniture, hardware, and raw materials. Often, these are rather low-cost franchise opportunities, but they are also not the most profitable franchises.
Business format franchises
In this franchise model, a franchisor provides a complete or almost-complete business format to new businesses. Depending on the particular enterprise, it can include a marketing plan and assets, a plan of business operations, and even instructions for hiring a team. Accordingly, it’s fewer resources you need to invest in a franchise like that.
Companies like McDonald’s, KFC, and UPS are all business format franchises: this model is especially well-fitting for the service provision and catering industries.
Lolo works as a business format franchise, too. We provide our business partners with detailed business and marketing plans, a strong brand, and many ready-to-use assets. And Lolo is definitely one of the most profitable choices among the franchises starting under $30k.
Conversion franchise businesses
Some franchises ‘convert’ independent local businesses for sale into franchise units. The franchisor then provides its brand, business and operations planning, customer service standards, and more to a local company.
Especially popular in the real estate industry, conversion franchise businesses also work well for service provision.
For the franchisee, this type of franchise provides a possibility to tap into the strength of a big brand, improve operations, escape fierce competition, and become a part of a larger entrepreneurial community.
Lolo can work as a conversion franchise, too: if you already own a ride-hailing business but are thinking about joining in with a strong brand.
Consider the state of local economy to choose your franchise
Ride-hailing franchises’ impact in developing countries
Researchers worldwide are still figuring out if ride-hailing services actually help improve local mobility and reduce carbon emissions and traffic congestion.
However, several recent inquiries prove that ride-hailing businesses can help fill what’s called ‘institutional voids,’ especially in developing countries. ‘Institutional voids’ are spaces in the economy where the existing businesses and governments fail to satisfy consumers’ demands.
Another study from 2021 proves, based on an analysis of a dataset (2006–2015) from 49 countries, that franchise businesses have the potential to impact the economic, social, and infrastructural development of a country in a positive way.
At Lolo, we know that from the experience of our ride-hailing business partners across the globe. Introducing an innovative mobility solution naturally improves transportation in your city—but there’s more to it.
When done right, a ride-hailing business in rapidly developing countries (for instance, the African continent and Latin America, but also the Middle East and the Asia Pacific) can:
- promote education,
- empower otherwise marginalized communities, and
- contribute to more efficiently allocating resources and negotiating relations in the local community.
For instance, we always find it inspirational how ride-hailing companies in countries like Soudan, Bolivia, or Egypt take a strong stand against the monopoly of Uber-like multinational giants and take care of drivers by educating them and inspiring growth.
Ride-hailing franchise businesses in the global North
As opposed to developing countries, the economies of the global North often should seek degrowth rather than growth.
This doesn’t mean launching a ride-hailing franchise business isn’t a good idea. On the contrary: investing in an innovative ride-hailing business is smarter than spending your money on a brand store or reselling raw materials.
If you want to start your own business today, consider service businesses for sale that deal with sustainability and carbon emissions reduction.
For example, with a ride-hailing franchise, one can easily join in such degrowth-related trends as sustainable and green mobility, helping customers to make more conscious everyday choices.
Wrapping up…
These were the most exciting insights on the data-backed expectations around the franchise market, most profitable franchises and the low-cost franchise opportunities. To make your choice even easier, we’ve made this smooth infographic of how complex starting a franchise can be, depending on the industry.
Our data accounts for many aspects of the franchise business, such as set up price, general fragility of the enterprise in an unstable market, scaling costs, and more.
The data in the table is ranked from 1 to 5, where 1 is the least important indicator and does not require resources, and 5 is the most important and costly.
Feel like discussing your franchise choice? Reach out to Lolo!
