9 Types of Franchises to Consider for Your Franchise Portfolio

Building a diversified franchise portfolio is your key to long-term franchise success. Explore the different types of franchises you can open and the benefits of each.

The franchise business model enables a franchisor to grant an entrepreneur the right to open a business using its trademark and brand for an ongoing fee. Opening a franchise can be less risky than starting a business from scratch because it offers potential financial projections and a track record of success. According to Guidant Financial, people turn to franchising to achieve autonomy, find a future outside corporate America, and pursue their passion.

Many franchisees open multiple brands to increase revenue potential and leverage their existing customer base. Finding the right mix of franchises for your future can be difficult. To get started, let’s break down the different types of franchises to consider.

1. Business format franchise: A business format franchise is the most common franchise. You get a turnkey business with a proven brand, training, and ongoing support. You’ll follow established procedures and receive marketing guidance to help build a loyal customer base. This type of franchise provides brand recognition, and you’ll need to adhere to the franchisor’s standards. A low-performing location can diminish the brand’s reputation.
2. Job franchise: A job franchise is more commonly known as an owner-operator franchise, and it’s sometimes a solo venture. People who launch a job franchise plan do not plan to hire employees. It’s a great option for someone who wants a low-investment business with the potential to scale. Job franchises often rely on a mobile van and do not require a retail storefront.
3. Service franchise: As a service franchisee you deliver a service, rather than a specific product. Examples of service franchises are home remodelers, cleaning services, and personal care businesses, such as hair salons. A service franchise, like The Tailored Closet, prioritizes building strong customer relationships and delivering superior customer service. Service franchises rely heavily on positive customer reviews and referrals to be successful.
4. Conversion franchise: If you have an existing business, converting to a franchise can enable you to ramp up sales and take advantage of existing marketing strategies.
5. Management franchise: A management franchisee is often referred to as a semi-absentee owner. They hire employees to manage daily operations and focus on strategic planning and growth. Finding reliable managers can be challenging in a tight labor market.
6. Area development franchise: As part of an area development franchise deal, a business owner gains the right to operate multiple locations of a franchise in a certain territory. You’ll have a higher upfront investment, but your locations can share resources and establish a strong brand presence.
7. Product franchise: A product franchise owner exclusively distributes a franchisor’s products in a certain region. Also known as a distribution franchise, a product franchise needs a warehouse to store items before you can deliver them to clients who sell the product to customers. Pepsi is an example of a product franchise. Your success will hinge on the popularity of the product you’re distributing.
8. Manufacturing franchise: Unlike a product franchise, a manufacturing franchisee handles the manufacturing of products as well as distribution. A manufacturing franchise has a high initial investment, and you’ll have to adhere to strict guidelines to ensure consistency.
9. Investment franchise: This type of franchise is for someone focused on building their portfolio. An investment franchise requires a high initial investment, but the owner is not responsible for handling daily operations. Hotels or realty businesses are examples of investment franchises.

Choose the Best Franchise for You

Now that you understand the different types of franchises, you can pick a business that aligns with your financial and lifestyle goals. The Tailored Closet is a leading option for people with business acumen and a customer-service mindset. You don’t need experience in home remodeling to thrive as an owner of The Tailored Closet. Our service franchise provides entrepreneurs with a flexible business in a thriving industry with a low initial investment.

Consumers are searching for storage solutions throughout their homes, and custom solutions are in demand. The home organization industry is valued at $14.2 billion and is forecasted to reach $15.3 billion by 2028, according to Freedonia Group. We cater to customers who want to banish clutter and find joy in their homes. We focus on custom closets and whole-home organization for home offices, laundry rooms, mudrooms, pantries, and more.

Inquire now to learn more about franchising with The Tailored Closet.