Some budding entrepreneurs launch franchise businesses not simply to make a living. Instead, they have much loftier aims and seek high-end franchises with the potential to make a substantial profit.
What is meant by a high-end franchise?
This is usually a satellite venture for a luxury brand, one that has already carved a niche with consumers willing to pay a high price for a product or service. It can also include opportunities in which your initial investment is substantial, but the likely returns make this well worthwhile.
For instance, some hotel franchises take an existing business model and provide you with the opportunity to open your own accommodation in a relevant location. Luxury jewellery, antique and fine art businesses favoured by the wealthy do sometimes seek well-vetted franchise partners. However, both food franchises and beauty franchises are also worth exploring, if you want to be your own boss and connect instantly to discerning and affluent buyers.
If you have taste for the finer things in life – or you would prefer to develop sales channels to those who do – what sort of high-end franchises offer the best chance of success at the moment?
Do people have money to spend?
Of course, economic prosperity is uneven, both globally and in the UK, making it important to pick high-end franchise opportunities with particular care. To illustrate this point, at the end of 2019, the six richest people in Britain had the equivalent wealth of the 13 million UK residents at the other end of the scale.
It is also worth noting that according to the FT’s analysis of statistics from the Office for National Statistics, amongst the people born between 1946 and 1964 (baby boomers), one in five are millionaires.
If it’s a more global picture that excites you, Credit Suisse’s latest wealth survey reported that there are 46.8 million millionaires in the world. In the US alone, they estimate that 1,700 new millionaires emerge every day.
Statistics like these clearly show that even after a pandemic and economic restriction, there are plenty of people with disposable income. Including high-rollers with cash to splash and wealthy individuals willing to pay higher prices if you’re offering something worthy of their interest.
Which leads us to look at food, beauty and leisure travel as fertile options.
Hotel franchise overview
According to the Luxury Institute’s survey into spending habits amongst affluent consumers in the UK, US, some European countries and China and Japan, leisure travel is set to be where the steepest increase in spend lies. With dining out in second place (more on this later).
Keep in mind that high-end franchises – with the potential for substantial returns – don’t always have to be aimed at affluent customers though. The perfect example of this is easyHotel plc. This is a hotel franchise opportunity that gives you a firm foothold in the budget accommodation sector. A part of the hospitality industry that is relatively resilient and likely to be ripe from growth in the coming years.
easyHotel is not an option for anyone looking for a quick, low-cost entry point for the world of franchising. You need capital to construct a new building or convert an existing one, to the standard required, and in a location with sufficient market potential. However, the returns from a successful venture could be considerable, especially as this company is known for its competitive sign-on and annual franchise fees. It could also be your chance to open a franchise business overseas, as this is a truly international company.
Big profits in top class food
The British love their food. They are consistently willing to shell out for meals and dining experiences that are indulgent or strikingly unique. This covers, for instance, luxury food delivery businesses and caterers for up-market events such as The Gourmet Hog Roast Company.
Again, your ambition might not be to reach big spenders. You could go after large numbers of customers to generate big profits. This could point you towards food franchises that enable you to open multiple outlets in one region, or even nationwide. This sort of high-end investment is welcomed by some ambitious restaurant chains.
Luxury beauty franchises
One sector that attracts both a quick-growing customer base and a willingness to buy luxury products, are hair and beauty franchises. It will not surprise you to learn that online demand for products in this category has rocketed in recent times. According to Mintel, the value of the UK beauty and grooming increased by 24%, to an eye-watering £1.9 billion in 2020.
If you can show your range has some sort of competitive edge, such its purity or scientific efficiency, or you can throw in sustainability priorities, you tick the important boxes that will make consumers spend more, or more consumers spend.
Connecting to a high-end franchise
Even if you have a preference and the drive to opt for a high-end franchise, as with any start-up venture you’re advised to do lots of research. Dig deep into the range of franchise opportunities out there, there are thousands.
Whether you are seeking a luxury brand to promote, or you are willing to invest substantial capital, the big money returns still rely on good old-fashioned legwork.