There are many opportunities for franchise investment in the United States, from traditional sectors such as fast food and retail, to emerging industries such as technology and sustainability. However, not all franchises are equally profitable or offer the same long-term growth potential. Choosing where to invest your money can make a big difference in your financial results.
In this article, we will look at three industries that, at Interlink FBC, we consider to be strategically promising for their high return on investment, stability, and potential for expansion. In addition, we will show you three sectors that are best avoided due to risks, market saturation, or changes in consumer trends. Move forward to find out where to invest your money in the United States, and where not to.
Industries where you could invest in the United States
1. Fundraising franchises:
Fundraising is an industry with significant potential, especially when it focuses on specific segments such as education and student support.
Franchises like Apex Leadership offer innovative programs that not only help raise funds, but also promote students’ personal and academic development. With relatively affordable investments ranging from $81,000 to $117,000, and a tangible social impact, this industry stands out as an attractive option for investors.
2. Garbage compaction franchises:
Waste management is a constant necessity in any society, and franchises that are dedicated to garbage compaction offer effective and cost-effective solutions.
Companies like Smash my Trash, which have national contracts with large suppliers like Amazon, ensure a stable and lucrative workflow. Although the initial investment may be higher, with amounts ranging from $300,000 to $350,000 due to the need for specialized equipment, the potential for long-term growth and profitability more than compensates for this initial outlay.
3. Art education franchises:
For those investors interested in a business that offers flexibility and a collaborative community, arts education franchises, such as Tippi Toes, are a great option. Not only do these companies provide dance classes and creative activities for children, but they also foster a welcoming and supportive environment among franchise owners.
With a focus on the holistic development of students and a strong support network, these franchises are ideal for investors with specific needs, such as single mothers with school-stage children, who are looking for an investment compatible with their lifestyle.
But, don’t go yet. Below we will reveal which are those industries that although they seem attractive, they are not…
Industries Where You Shouldn’t Invest in the U.S.
1. Restaurant franchises
Despite its initial appeal, investing money in the restaurant and food industry presents numerous challenges that can hinder long-term profitability.
In this industry, the initial investment can range from $500,000 to $1.5 million, and the fixed costs are usually high. This means that if the business experiences a slow month in sales, owners may find themselves in financial distress without an adequate emergency fund to cover operating expenses.
Expansion in this industry is also costly and complicated. While in other sectors a franchise can easily expand by acquiring new territory, in the case of restaurants, expansion involves duplicating investments and facing additional challenges such as finding suitable locations and adapting to local regulations.
Another factor to consider before investing money here is the quality of life of the owners. Restaurants often require extended hours, including weekends and evenings, which can negatively affect investors’ personal lives. In addition, high staff turnover can result in additional costs and difficulties in maintaining a stable team.
In addition to the aforementioned challenges, profit margins in the restaurant and food industry are usually relatively low, usually around 15 to 17%. This means that, even with successful operation, the benefits can be limited.
Finally, the process of starting operations in a restaurant can be lengthy and complicated. From negotiating commercial leases to obtaining licenses and permits, the time required to start a restaurant can extend up to a year or more.
2. Virtual teaching franchises for children:
Although teaching is a noble and necessary field, investing in virtual teaching franchises for children can be complicated. In fact, they are often incompatible with certain types of investment visas.
The lack of physical interaction and the need for an active and tangible business make these types of franchises less suitable for investors looking for solid and profitable opportunities.
From a financial perspective, these franchises rarely offer significant profit margins. Although there may be successful franchises in this area, the lack of a proven track record of profitability can make it difficult for investors to assess the potential return on their investment.
3. Unproven innovation franchises:
Finally, investing in innovative and unproven franchises is discouraged. Although these franchises may have the potential to be disruptive in their respective industries, they can also be extremely risky, especially for those who have limited financial resources.
Innovative franchises may lack an established track record of success and may be in the early stages of development. This means that investors are taking on more risk by investing in a concept that has not yet been tested in the market.
In addition, these franchises can face unique challenges in terms of growth and expansion. Rather than entering an established market with an established customer base, investors may be engaging in a parallel growth process with the franchise, which can lead to uncertainty and volatility in the first few years of operation.
*Data as of the date of publication of the last FDD of the franchises
*Values expressed in US dollars
Wondering how and where to invest in the United States?
When considering investment options in the United States, it is crucial to carefully evaluate the opportunities and risks associated with each industry.
Franchises that focus on sectors such as fundraising, waste management, and arts education offer promising prospects for investors looking to earn strong returns and contribute positively to the community. However, these industries are just a few of the many available.
At Interlink FBC we have a portfolio of more than 750 franchises in 35 different industries, which meet the criteria for long-term profitability. Contact us for personalized advice and to find out where you can invest your money in the United States.
