Sam Walton opened the first Walmart store in 1962 in Rogers, Arkansas. Today, it is a global giant, with more than 10,500 stores worldwide. The first McDonald's was opened by the McDonald brothers in 1940 in San Bernardino, California, and its first franchised restaurant by Ray Kroc in 1955 in Des Plaines, Illinois. Since 2023, there are 40,801 restaurants world.

Both these global giants started with just one unit. So can you. In fact, today's technology allows a franchisor—or a franchisee—to grow name recognition and a business faster than Sam or Ray could have ever dreamed.

Enter the first floor

As a potential franchise, it's definitely tempting to buy into an established chain, and as a company that's helping more mature companies continue to expand, we know that many of them still have plenty of room for growth. But there's a price: you're paying the franchisor more for that lack of risk, which limits how much you can compound your profits. Additionally, your geographic reach may be limited – if your chosen market is already maxed out, you'll need to look elsewhere, which may be far away, both geographically and in terms of your comfort zone .

Think about the opportunity to get in on the ground floor of one developing chain. It's less well known, so it's probably a lot less expensive. As of 2021, McDonald's The website says it requires a minimum of $500,000 in unencumbered personal resources to consider someone for a McDonald's franchise. A typical McDonald's can cost the franchisee between 1.5 – 2.5 million dollars and you may be limited in where you can find.

Then take a look at a still growing chain like our client Halal guys, which has fewer than 500 restaurants open and planned. Typical domestic investment costs, including franchise fees, range from $542,025 to $1,459,425. An even newer chain, such as the quick-service Mexican restaurant Cilantro Taco Grillnecessities cost from $378,000 to $831,000.

And you have a much better chance of getting the territory you want for much less money, a huge benefit for first-time franchisees. Then, like yours ROI is higher, you can continue to invest in more units at that still lower price. Your composition is much larger than with a mature concept.

Social media marketing

Are you afraid of working with little known? Do not be. It's also much easier than in previous years to create a buzz around a new concept, thanks social media. Young consumers are always looking for something new, and if they find it and like it, they tell their friends and followers all about it. They, and TikTok/Instagram/whatever, do a lot of your marketing for you. This unknown name will not be unknown for long. And this marketing builds on itself, like many effectors have followers in other regions. Could someone who liked another franchisor's restaurant in Boise, Idaho affect your Louisiana territory? Count on it.

With a growing chain, the chances are also much better that you will have more personal contacts and support from the founders. (I bet some individual franchisors are based on their name CEO of McDonald's (Chris Kempczinski, no matter what a nice guy he is.) Meanwhile, early franchisees can have access to the advice and sometimes just the sympathy of the founding franchisor and their early unit owners. Early adopters of Cilantro Taco Grill, for example, will benefit from the marketing expertise of Armando Christian Perez, an investor who is committed to helping Latino hourly workers become business owners.

You may know Perez better as rapper/songwriter/actor Pitbull. We are all excited to work with him.

Connected: See the Franchise 500 2024 rankings

Family feeling

In time, too soon Franchises become almost like a family. And over time, they can turn those experiences into new investments.

Nearly 30 years ago, Donald Bauer, a small Domino's Pizza franchisee, joined Philip Horn to help him run his Pope John franchise restaurants. Together, they built that fledgling chain to more than 60 units and then built a 24-unit restaurant. Everything chain, at that time relatively unknown. They sold it and are now expanding Jersey Mike's franchises, and opening quick-service chicken and salad restaurants. In fact, they've done so well in dining that they're taking their business expertise to another emerging concept— GLO30a skin care membership concept founded by doctor who Fransmart it's helping.

As any investor will tell you, it pays to get in on the ground floor – if you and the concept are smart. For example, someone who bought and held $10,000 of Amazon stock at its 1997 IPO would have had $16,454,196 in 2022. Of course, no one can predict that kind of return for anything – just think of the spectacular collapses of the past few years (RIP, Blockbuster). Remember that in those 25 years, Amazon has had its share of truly scary days.

But the stock market is much more volatile than a successful franchise restaurant or retailer. Franchising can take some of the “scary” out of the developing business equation. You already have a strong one CONCEPT, the benefit of support from your founders and fellow franchisees, and the ability to grow a business before it becomes too expensive an investment to consider. It really can be a risk worth taking to make a life-changing fortune.