They're the A+ students of the franchise world--the overachievers who never settle for being just one of the best. No, these franchises aren't content unless they're at the head of the class, and that's just where they landed this year: on Entrepreneur's Best of the Best list. Here you'll find the franchises that didn't just rank in the Franchise 500®--they ranked at the top of their respective industry categories.
Keep in mind as you review this list that even the best franchise isn't always the best fit for everyone. To find out whether an opportunity is right for you, read the Franchise Disclosure Document, consult with attorneys and accountants and talk to current and former franchisees. You'll never regret investing extra time in getting to know a franchise before investing your money.
In the interest of getting to know our Best of the Best franchises better, we asked some of them to share some views on their philosophy for success and just what makes them stand out from the crowd. Look for their insights throughout the list.
One thing all our Best of the Best companies seem to agree on is that you can't have a great franchise without great franchisees. But what makes a great franchisee? Here's what a few of them had to say:
"A great franchisee is so much more than someone who looks good on paper. [They need] an analytical mind, an engaging personality and an instinct for connecting with people." --Alan Storry, VP of franchise development, Regis Corp. (whose brands include Supercuts)
"A person who will work within the box and yet can think outside of it." --Jim Olson, director of franchise development, Novus Glass
"We like entrepreneurs who are hands-on and very involved with their business. Our team operates that way, and when our owners share that passion and commitment, we all succeed." --Jim Bennett, director of franchise operations, Mr. Payroll
"A great franchisor has the ability to see things through the franchisees' eyes, and a great franchisee can see things through the franchisor's eyes." --Mark Dawson, president, Glass Doctor
"We are not looking for the next sale--we are searching for the next successful and satisfied franchisee."
"The days when you could sell a couple of franchises to the person next to you on a cross-country flight are back."
Let's explore on the kind of research and understanding of the business required for seed investment
There is no dearth of good and executable ideas but the challenge lies in finding those very few founders who have the conviction to execute their beliefs effectively. There are multiple factors to consider before investing in a startup as an angel investor but the Top 5 things one should consider without fail to succeed are as follows:
Like any other investment instrument which requires some level of research, investment in a startup also requires a lot of understanding and knowledge about the sector to understand the hidden nuances of that particular business. It is also imperative to weigh the calibre of the founder to understand his sector understanding, approach and future plans, both short and long terms, as a growth driver.
Market Saturation point – does the company have a low market risk, to dominate the market share of the total available market
It has been witnessed that angel investors who support young businesses from their own domain areas have a far higher success rate compared to others who are betting on market trends based on external opinions.
Being an angel investor, one has to be prepared to be a part of that eco-system and support the startup with all possible resources. It is equally important to mentor the founders, provide networking opportunities and moral support as it is to support them financially.
Angel investment is more than pure investment in an idea or a startup; it is about investing your time, resources, finance, experience and belief and being prepared to support the journey of the young founders through the thick and thins.
This is a risky asset class. The law of small numbers can lead to a complete loss of investments. One has to remember that investing in startups is all about talent acquisitions and ensuring you are in the right industry.
An angel investor should try and build a portfolio of at least 10 to 20 companies and limit portfolio exposure to about 10 per cent of investable assets. The bigger financial institutions that take significant risks do not tend to allocate more than 10%.
As Angel investors, one does not have the staying power or the financial expertise, so try and limit the size of the overall exposure to ensure stability.
While many of the investments may not derive the expected returns, one startup in the portfolio may create enough opportunities that hedge all negatives. As an angel investor, one should have enough reserve funds to do a serious follow-on funding on the company that is doing well in order to maintain your percentage ownership during the next round of funding.
The right exit strategy can actually create wealth for an angel investor. It is important for an angel investor to have a forward-looking strategy with planned exit to create maximum ROI (Return on Investments) from all investment companies.
Globally, only about 20 firms or so, in the universe of venture capital firms, generate 95 per cent of the industry’s returns. They succeed because they have proprietary knowledge of the characteristics of winning companies.
As an angel investor,I prefer to invest in startups that have a low go-to-market risk and high technical build risk. In other words, I like to invest in concepts, products and founders.