Owning and operating a small business can be tough. Because of this, many prospective entrepreneurs decide to channel their successful business ideas and hard work into franchises instead, reasoning that these companies have an existing brand identity, set products, and services that can help them thrive. In some situations, this is a smart choice: some of the best food franchise opportunities, for example, provide their members with extensive franchise training and support to help ensure their success. However, other small business franchise opportunities are bad investments which show little growth and are often willing to let their franchise partners sink. To help potential entrepreneurs avoid these vendors, Forbes magazine compiled a list of the worst franchise systems in the United States. Keep an eye out for these disreputable companies and their bad qualities to help you identify the best food franchise opportunities and other business choices when they come along.
Topping the list is SuperCoups, a company that helps small businesses send coupons and direct mail to their consumers. While marketing help is a key component of many ideas for a successful business, SuperCoups is far from a good choice for a potential franchisee: the company requires an average initial investment of $33,625 but features a growth rate of -22% and a continuity rate of 20%. Moreover, Forbes gave the company a “C” for franchise support.
In theory, Realty World could be a workable concept: franchisees sell residential homes and mortgage options to consumers, which they reach through the parent company’s online tools. But while Realty World has a higher chance of continuity than SuperCoups, with a rate of 30%, the company is just as bad on an investment. Franchise partners spend an average of $48,850 upfront, but only receive 25 hours of initial training from a company that received a “D” grade for franchise support. With these figures, it’s no wonder that the company has a growth rate of -21%.
Book lovers have long complained about the steady disappearance of brick and mortar bookstores, but Christian book retailer Parable isn’t helping matters. The company is one of the largest Christian retail groups, with most of its affiliated bookstores owned and operated as franchises. Unfortunately, it costs franchise partners an average of $127,500 to join the operation, and Parable only provides nine initial training hours and offers a growth rate of -20%. They also received a “C” in franchise support. Apparently the commandment “love thy neighbor” doesn’t include training and assisting them in their business attempts.
Forbes‘ findings are discouraging, but demonstrate the importance of finding good franchise opportunities before making an investment. The best food franchise opportunities, for example, will have high-quality products, a strong and consistent brand identity, and will demonstrate healthy growth. They will also provide useful franchise support and plenty of initial training to help new members thrive. If you’re interested in starting your own business or joining a franchise, keep an eye out for these qualities.