Most Profitable Franchises for 2022 (and Calling Out the FAKE Lists)April 5, 2022
Join us in calling out other “fake” most profitable franchise lists, and learn which brands are actually the most profitable for 2022. Rely on experienced data from Franchise City, not media hype!
We search for “most profitable franchises in 2022” Nerdwallet is the first hit and they have McDonalds at #1. These lists always pick McDonalds because, well it’s McDonalds, it must be the most profitable? We’ve covered McDonalds before and we know even in average gross revenue they are not the highest earners at 2.9m, and after expenses leave you about 8-15% margin. But what about the highest earning McDonalds franchise, is that the most profitable? The most profitable McDonalds’ in 2020 did $9,238,000. So even for highest gross revenue it’s not the most profitable I can name two franchises off the top of my head in printing and senior care, who had individual franchises doing almost 30 million a year with a $200k investment.
Sonic is listed as a most profitable but they are even further down the revenue list grossing only 1.6m a year, with a 2m investment. Dunkin’ is listed as a most profitable franchise. Dunkin closed almost 500 locations in 2020 and will close more, and their financials show gross revenue of 1.2m for drive through and $886k for non drive through, at 10% margin your profit would be about 90k-120k.
Anytime Fitness is listed, here is their Monthly total revenue, this includes all memberships, pay per visit, and personal training average revenue for locations in 2020, let’s call it around $25,000 a month, that’s $300k gross revenue a year! Now back out your rent, equipment leasing, ad spend, how much is left?
More fitness locations and then some schools that are nowhere near most profitable. In fact even in the child education sector these schools are far down the list. Here is Startupguys most profitable list, same McDonalds, it has Supercuts – it even shows here annual revenue of $262k. That is gross revenue! Dunkin again, and at the bottom it says they used information from the Franchise 500 (which we have debunked before) you would be amazed how they pick these franchises, but apparently the most profitable Franchise to own overall is Taco Bell! In reality their gross revenue is only 1.6m and about 20 franchises, even just in this food list beat them. Chick-fil-A is at the top with over 5m a year.
Let’s look at some real data of most profitable brands and what we like for 2022
Fitness. Everybody got plump in lockdown. The expectation is people will begin hitting the gyms again. The problem is most of the well-known franchise names that all fight for low monthly fees are also low in revenue. There are some niche markets in fitness that can be more profitable. Yoga for example, you have no equipment costs, operations are minimal and some studios show average revenues more than double a traditional fitness studio ($847k) with lower overhead. You can see here up to 1.2m. There are quite a few niche fitness concepts including martial arts, that can be more profitable than traditional gyms.
Automotive. When the economy cools, which it will, people drive cars for longer and need repairs. You all know the big names in franchising in automotive, and they can be profitable, but there are niche auto franchises with investments from $300k and up that show top quartile averages above $400k NET profit annually. Some oil change franchises have top performers at almost $700 Net profit annually, investment around $300k. There are now single bay oil change franchises, really neat concept that is a lower investment just over $100k. Most franchise owners do not have automotive experience or come from an automotive background.
B2B Consulting. Startup around $65k, top quartile operators do almost $700k a year, top 10% over 1.2m with an average across the board of $230k. Low overhead, usually work from home so minimal expenses. So a work from home executive gig where you can earn 6 figures in your pajamas. You’ll need executive B2B experience in this type of business.
Renovation. From an investment to profit ratio there is one brand in the home reno sector that beats some million dollar investment food franchises for far lower investment. About $80k all-in with average net profit of $217k. This brand has grown a lot, and there are very few territories remaining, give us a call to see if your territory is open. Another brand in renovation shows EBITDA of over 1.5m for their top 10%
Senior Care. 10,000 boomers turning 65 every day in the USA, they need care. As noted we have seen a franchise in this sector generating 28 million a year. Of course we also see people fail! So be sure you align your skills and market demand. Some systems show average revenues of 1.8m with gross profit margins of 43%.
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