Franchises provide a proven business model for those looking to start their own business. These businesses have a track record of success and offer support and resources to franchisees. Among the many metrics that prospective franchisees must consider when choosing a franchise, profitability is one of the most important. While many franchises claim to be profitable, not all live up to that claim. If you are looking for a tool franchise for sale, here are the top 5 most profitable tool franchises in the United States.
- McDonald’s
McDonald’s, a quick-service restaurant chain, is one of the most profitable franchises in the United States. The company has been in business for over 70 years and has a global presence in over 110 countries. McDonald’s is a publicly-traded company with over $100 billion in market capitalization. It has a net profit margin of 26.7 percent and generated annual revenue of $21.08 billion in 2019. McDonald’s’ success is due to its global reach, brand recognition, and efficient business model. As of 2019, the company has over 38,000 locations in more than 110 countries. The number could be higher if you factor in the company’s growth, which is rising.
Initial Investment: $1,314,500-$2,313,295
Initial Franchise Fee: $45,000
Cash Requirement: $500,000
- 7-Eleven
7-Eleven is the most profitable convenience store franchise in the United States. 7-Eleven was founded in 1927, in Dallas, Texas, by John Jefferson Green (J.J. Green). The chain began as an ice house marketplace during the Depression. The first store, called “7-Eleven,” was established in 1946. Today, the franchise is seeking new franchises worldwide. The company has a net profit margin of 8.5 percent and generates annual revenue of $32.4 billion. 7-Eleven was founded in 1927 and had over 66,000 stores in 18 countries. As of 2021, there will be 77,346 units, a 16.8% increase over the past 3 years.
Initial Investment: $69,650-$1,233,900
Initial Franchise Fee: $0 – $1,000,000
Cash Requirement: $50,000-$250,000
- The UPS Store
Next up is The UPS Store, a retail location that offers postal, business, printing, and communications services. The UPS Store has been ranked as the second most profitable franchise in the United States by Franchise 500. The company was founded in 1980, and as of 2021, there are 5,359 units in operation. This is a 5.7 percent increase over the past three years. The UPS Store offers to finance for those interested in starting a franchise through Guidant Financial.
It is also worth noting that 84 percent of the population in the United States lives within 10 miles of a UPS Store. What makes The UPS Store so profitable is the array of services. Not only does it provide postal services, but customers can also take care of business needs such as printing and copying. This one-stop shop is convenient for customers and provides everything they need under one roof.
Initial Investment: $185,306-$474,193
Initial Franchise Fee: $29,950
Cash Requirement: $60,000-$100,000
- Taco Bell
Taco Bell is a Mexican-inspired food franchise that has been around since 1962. With 7,567 units as of 2021, this franchise has seen a 9.6 percent growth over the past three years. The initial investment for a Taco Bell franchise ranges from $576,000 to $3.4 million, and the company requires a net worth of $1.5 million. Taco Bell’s parent company, Yum! Brands Inc. is the parent company of Mark King, the current CEO. The company has seen success due to its crave-able food and innovative marketing campaigns.
Initial Franchise Fee: $25,000-$45,000
Initial Investment: $575,600-$3,370,100
Cash requirement: $750,000.
- Ace Hardware
Ace Hardware is an American hardware retailer chain. It was founded in 1924. As of 2021, the company had 5,554 units, a 7.2 percent increase over the past three years. In terms of profitability, Ace Hardware is doing quite well. In 2020, the company reported a net income of $330 million. This was an increase of $13.1 million from the previous year. Today, Ace Hardware is one of the most well-known and respected hardware retailers in the United States. The company emphasizes helping customers find the right product for their needs and offers a wide variety of products, from traditional hardware to lawn and garden supplies. This allows customers to find everything they need in one place.
Initial Investment: $292,000-$2,119,230
Initial Franchise Fee: $5,000
Cash Requirement: $250,000
Net Worth Requirement: $400,000
Which franchise is profitable? All of the franchises mentioned above are profitable in their way. McDonald’s is the most profitable franchise globally. At the same time, 7-Eleven is the most profitable franchise in terms of total revenue, while The UPS Store is the most profitable franchise in terms of percentage of growth over the past three years. Taco Bell is the most profitable franchise in terms of net worth, while Ace Hardware is the most profitable franchise in terms of net income. These franchises have something different to offer and are all worth considering if you’re looking to start a franchise.