The Next Hot Franchise

The Next Hot Franchise

When I tell people that I am a franchise lawyer, they often ask: “What is the next hot franchise?” Relatives ask me to find them the “next hot franchise”.

And I have to ask them, “Why do you want to know?” What do you mean by “the next hot franchise”? If you want to know which franchise system is selling the most franchises per week, per month, or per year, you can look it up. But what does that really tell you? That the franchisor that sells the most franchises is the best? The most profitable? Or the one with the biggest marketing budget, the best advertising agency, the best public relations strategy, or the most emotional investment?

Several years ago, the “next hot franchise” was “I sold it” or any one of a number of e-Bay drop store franchises. They were selling like hot cakes. Rumors circulated about a waiting list for franchisees in some systems. So what happened? Well, the business model had a number of fatal flaws. What franchisees purchased was hype. There was never a proven business model or track record of success in this type of business. The franchisors themselves often did not operate a business of the type they were franchising, or if they did so operate, it was only for a short period of time. Not enough time to really determine if this was a successful business model or not. The “next hot franchise” is just that – all sizzle and no steak.

What my friends, relatives and acquaintances should be asking me is: “In what franchise system can I make the most money, or obtain the biggest return on my investment?” The next hot franchise is irrelevant. It may not be suited to your needs and desires for a number of reasons. It may not even be a profitable business model. What a prospective franchisee should ask is: What is the best franchise for me?

The answer to that question is for another blog post.