Why It’s Time to Buy a Franchise in California

If you live in California, you know that now is a great time to open a business. Over the last few years, countless companies have shut down. Some business owners simply chose to retire early. This introduced gaps in the market. Now, you can scarcely walk down the street without seeing a new business sign.

Things are opening up again. Commercial space is readily available. And many people have had time to reflect. They’ve decided to put their money to work for them. They want to become their own boss and achieve greater levels of work-life balance.

Whether you’re a seasoned professional or brand-new to ownership, starting a franchise is one of the best ways to create a business. A franchise does a lot of the initial work for you. It provides you with a proven business model—you just have to follow the plan.

But how do you figure out which franchise is the best option for you? I can tell you what worked for me.

Why Should You Buy a Franchise in California?

While I’m a business owner through and through, I’ve often found that the best, most successful, and most sustainable businesses are the ones that let you live a life worth living. After all, you want to get away from the daily grind—not just purchase another one.

Businesses are at their most vulnerable within the first few years. You may have heard that most businesses will fail within the first five years; that’s true. A business is difficult to launch. I’ve had my share of failures, even when everything seemed perfect.

When you purchase a franchise, you purchase confidence. You know that this business has worked in the past. You know that it can work in the future. Franchises have a lot of advantages compared to building your own company:

  • A proven business model | Franchise companies have already created processes and procedures that work. They know where to source materials from, how to hire the best employees, and where to find an audience. They know which locations work best for them, and they’ve already done quite a bit of market research.
  • Support from the franchise company | The franchise company can offer you support that you couldn’t get otherwise—such as a wealth of training materials and a community of like-minded business owners. These operate like “training wheels” for owning your own business.
  • Brand recognition and marketing | This is the big one. When you own a franchise, you don’t need to tell people who you are; they already know. You don’t need to spend millions on the creation of marketing materials. It’s already been done for you.

Of course, there are some downsides to building a franchise, too. There are downsides to everything. If you decide to buy a franchise, you should be prepared for:

  • A higher upfront cost | You have to pay an initial franchise fee in addition to all the other costs of starting a business. This franchise fee varies depending on the type of business you’re starting.
  • Royalty fees | Once you’re up and running, you need to continue paying royalty fees to the franchise owner. These royalty fees may taper off over time, but they’re always going to be a significant expense.
  • Experience | Most franchises require you to have experience managing a similar business in the past. Others might require you to go through a complex or lengthy training program.

Even when considering those disadvantages, I knew that a franchise was for me. The bottom line was that building a franchise business is more manageable. Most of the initial business structure was already done for me. The franchise fee was more than worth it in exchange for the name recognition and the business model.

Why reinvent the wheel?

What You Should Look For When Buying a Franchise

So, how do you find the right franchise for you? Of course, a big part of it is location—not every national franchise will be right for California. When selecting a franchise, you need to consider the following:

  • Initial investment | Most franchises require not only a license fee but also proof of a certain amount of funds. You will need to meet net worth requirements to show that you can support the franchise successfully.
  • Autonomy | How much will the franchise control your business? Will you need to follow strict processes and procedures, or do you have a little leeway? Some franchises exert a lot of control over their operators; others, almost none. 
  • Marketing and name recognition | Will your business sell itself? Or will you still need to do some selling? If you’re working with a national franchise, you’ll find it easier to get customers than if you’re working with a local franchise. 
  • Training and support | What tools will the franchise provide? Are they going to be a true source of support for you? Or are they just going to take your initial investment and give you their name?
  • Competition | Are there a lot of similar businesses in the area? Do they make sure that their franchisees are relatively spread apart, or will they create your competition for you?

For different people, different things will be important. 

I wasn’t all that worried about my initial investment. I was more concerned about autonomy. I wanted the marketing and name recognition of a big, nationally recognized brand—but I also wanted to retain control over my life and business.

Of course, when I chose my first franchise, it also wasn’t during a major economic crisis. Now, I know that there’s another element at play: being recession-proof.

We now know that retail businesses, restaurants, and social venues may be vulnerable in the future. But, likewise, we know that certain industries—such as real estate—remain remarkably resilient.

The Most Popular Franchise Businesses in California

So, what are some of the most popular franchises in California? You probably won’t be surprised. Coffee shops, cleaning companies, fitness centers, fast food chains, and (of course) real estate are all near the top.

Coffee Shops

If there’s one thing Californians love more than smoothies, it’s coffee. There are probably over 10,000 coffee shops throughout the state. Many of them are chains. You can choose a national coffee shop chain or a local one.

  • Pros: Coffee shops are a proven business model. As long as you manage your coffee shop correctly, find the right location, and take pride in your product, you’re likely to make a profit.
  • Cons: Coffee shops are very hard work, and their profit margins are surprisingly thin. While you’ll be able to make money, you’ll spend a lot of time managing your shop—and the money may not be that great. And if you aren’t one of the “top 3” coffee shops, you’ll find competition quite high.

Cleaning Companies

Cleaning companies are the quintessential “beginner’s business.” Why? Because they’re easy to set up. You can create a power washing company with a $1,000 powerwasher—you can create a maid service with $100 in cleaning supplies. The barrier to entry is even lower when you work with a franchise.

  • Pros: You can start a cleaning business fairly easily; you just need to pay the license fee, buy the equipment, and hire employees. Everyone needs cleaning services, especially Californians on the more luxurious sides of town.
  • Cons: It’s hard, back-breaking work. Most owners can expect to be owner-operators for at least the initial years. It can be difficult to scale a cleaning company, and because cleaning companies are such a popular business, it’s also highly competitive.

Fitness Centers

Fitness is one of the most popular pastimes in California, so it makes sense that starting a gym, yoga studio, or climbing center could be a great idea. I certainly considered it. Many fitness studios were forced to close down during the pandemic, leaving the competition slashed.

  • Pros: You can get in on the ground floor. There’s a lot of opportunities for gyms and fitness centers right now—people want to get out and get active. I’m sure I’m not the only one who needs to get back into shape after two years of staying home.
  • Cons: These franchises are expensive, and (let’s face it) the timing isn’t suitable for a giant room full of people breathing hard in public. Plus, many people have realized they can work out at home with Peloton bikes and other at-home equipment. 

Fast Food Chains

What comes to your mind first when you think “franchise”? If you’re like me, it’s fast food. Fast food is probably one of the most popular types of franchise business out there. They have instant name recognition, extremely proven business models, and everyone has to eat. 

When I first started investigating franchises, I thought I’d end up with a food franchise. But I quickly determined it wasn’t right for me.

  • Pros: You can make a lot of money with the right franchise. After the franchise is set up correctly, it can practically run itself—although you’re still going to have to do a lot of management.
  • Cons: It’s competitive. Incredibly competitive. And it requires a surprising amount of money to start out. Fast food franchises with name recognition can require you to have over $1 million in net assets. I didn’t have that when I was just starting out!

Real Estate

What’s hotter than real estate in California? No matter where you live in California, the real estate values are increasing. There are huge markets in California for wholesaling properties, flipping houses, or even just owning and renting out properties in California. A real estate franchise can help you get started. 

  • Pros: Real estate gives you true freedom. You can make money in real estate in a lot of ways. You can buy it and hold it for equity, rent it out to tenants, or try to rehab it and sell it for a profit. 
  • Cons: You need to know your stuff. I already had a background in real estate; maybe you don’t. But working with a franchise means that you should receive the initial training you need to set up your franchise business structure, open and start your business.

Why I Decided to Become a HomeVestors® Franchisee

Maybe your real passion is mobile dog grooming or bread making. If there’s something that you’re truly passionate about, that could be your perfect franchise. 

Personally, I wanted to achieve more freedom and a better work-life balance. I had already worked in the real estate industry, but I knew a HomeVestors franchise would get me more quality leads

Other advantages to working with HomeVestors included:

  • My HomeVestors franchise is independently owned and operated | I wanted to be my own boss and retain my independence. I can run my own business the way I want to; I just get the support and mentorship that I need.
  • I didn’t have to put up a lot of cash upfront | Compared to some franchises, HomeVestors offered me the bang for my buck. Other franchises require you to have millions to put on the table. HomeVestors has an option for those who want to start franchising part-time.
  • I wanted to get into the real estate business | Real estate is incredibly flexible. I knew I could sell houses for a profit or even turn them into rentals. I could hold them for equity or I could flip them for fast cash. This gave me the financial stability that I wanted in a business.
  • I got the support that I needed | Being a HomeVestors franchisee means that I got to take advantage of the marketing tools, training, and support that HomeVestors provides. Even if I hadn’t known anything about real estate, I would have been able to get started easily.

It’s never been a better time to buy a franchise in California. If you want to learn more about becoming a HomeVestors® franchisee, the time to strike is now. Request more information and get started in the country’s hottest market.

Each franchise office is independently owned and operated.

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