IN THIS ARTICLE:
- Benefits of Investing in a Franchise
- How to Become a Franchisee
- How to Find Franchise Investment Properties with Reonomy
- How to Find Franchises for Sale with Commercial Listings
Whether you’re an investor looking to net-lease commercial property to franchise tenants, a business owner looking for a franchise to own and operate, or somewhere in between, finding the right franchise, however, is as much a matter of real estate as it is a matter of finding the right kind of business.
In this article, we’ll show you how you can find the ideal franchise properties from both an investment and business standpoint, as well as how to analyze the owners and tenants of those properties with Reonomy.
Benefits of Investing in a Franchise
Whether you’re looking for a smaller, regional franchise, or a globally-recognized business like Dunkin’ Donuts, franchise investment can be a seriously lucrative venture.
Let’s look at some of the benefits of investing in a franchise…
1. Turning a faster profit. While franchises will often come with higher upfront costs and the necessary cash on-hand, you can also turn a profit quicker than when investing in the property-alone.
2. Higher risk-floor. This does not apply holistically to franchises, but when comparing the investment risk of a one-off pizza parlor versus a Dominos franchise, for example, the risk associated with the franchise will be much lower, given the already-established brand name.
3. Brand Recognizability. Along with a name like Dominos or McDonald’s also comes years and years of marketing and customer relationship-building already in place at the start of your new business.
4. Access to Corporate Resources. Franchises also come with a great deal of corporate support.
Whether it’s discounted access to inventory, or access to staffing programs and training, being backed by a corporation has a lot of operational perks.
Overall, franchises have greater upfront demands, but more stability in place. Since you’re buying into a proven, already-established system, it comes at a higher initial cost.
How to Become a Franchisee
Real estate-aside, those looking to invest in a franchise need to first be approved by their corporate overseers as a viable franchisee.
In some cases, corporations will own some of their franchise locations, but on the whole, ownership is mostly open to investors.
Subway and Dunkin’ Donuts U.S. locations, for example, are 100% franchise licensed.
On the contrary, Starbucks does not franchise to individuals but will license locations to already proven establishments that a Starbucks can live within—like airports, grocery stores, or a hospital.
For example, as of 2016, McDonald’s owned roughly 15% of their 36,000 locations globally—properties that they’ll net-lease to individual franchisees to grant them the control over the property that they need.
The first step is to choose the franchise you’d like to invest in, which might be specific to your region, whether you’re in an urban or suburban location, and so on.
Once that decision is made, you can visit the corporate website of your desired business and fill out their franchise application. Most companies will have additional information, showing you the correct way to move fully through the process of applying.
Take Smoothie King’s franchise site for example. They walk potential investors through the steps they need to take to become a qualified Smoothie King franchisee.
Once you’ve been approved and have gone through the necessary orientation process, your search for property can begin. When all is said in done, finding the right real estate could be the game-changer for your franchise.
This is where Reonomy can help you dive into properties to see who the tenants are, who the owners are, and help you get into contact with them.
How to Find Franchise Investment Properties with Reonomy
You can find off-market franchise investment properties by the name of the tenant, the type of tenant, or simply by location and asset type.
Let’s say you’re looking to find a Dunkin’ Donuts for sale in the MSA of Trenton, NJ. With Reonomy, you can search off-market for properties in any market nationwide to find ideal investment opportunities and contact owners directly.
To find a Dunkin’ Donuts for sale, or likely to sell, your sequence of actions on Reonomy might look something like this:
- First, you’d apply a location filter for “MSA: Trenton, NJ”
- Then, you can use the Tenant search tab to search specifically for properties that have “Dunkin’ Donuts/Dunkin Donuts/dunkin donuts,” as a tenant.
- Alternatively, if you’d like to see Dunkin’ Donuts locations along with other similar businesses, you could search instead by tenant type. For example, you can search for properties using the NAICS code, “Baked Goods Stores,” or the SIC code “Doughnuts.”
To add more depth to your Dunkin’ Donuts for sale search, you can then add varying levels of building and lot, sales, debt, and ownership filters to generate more granular results. Learn more about searching for properties here.
- From there, you can analyze those Dunkin’ Donuts locations in great detail.
You can see the full building and lot specs of the property, including building area, year built, and so on. You can also see an aerial view of the property to gauge its proximity to popular roadways.
See the asset type breakdowns for the properties with said-tenant. For example, you can see whether a Dunkin’ Donuts location is a standalone property, part of a mixed-use property, or within other shops (say, a gas station).
By looking at the sales history of the property, you can also see if a franchise has been owned for a long time that might be likely to sell.
- See the other tenants in the building.
With any franchise, it is possible that they’re not the only tenant in the building, or that they reside in a strip mall or shopping center.
In each property profile page on Reonomy, you can visit the Tenant tab to see all of the current tenants of the property, along with the tenant’s decision-maker contact information (more on that later).
You’ll also be able to see the type of location of the property, including whether it is a “Single Location,” or a “Branch” — pertinent information given that branches are company-owned.
Let’s run through some additional examples to show the various ways you can use Reonomy and other online sources to search for specific franchise properties.
Find Properties by Tenant Name
Subway Franchise for Sale
Despite some struggles in recent years, Subway still has the most franchise locations in the U.S.—and by a large margin.
With more than 25,000 locations nationally, all of which are franchisee locations, Subway has almost as many U.S. locations as McDonald’s and Starbucks combined, who are the next two highest on the list.
If you’re looking for a Subway franchise for sale, you can search Reonomy for Subway properties by tenant name or tenant type.
The NAICS code for Subway restaurants would be “Limited-Service Restaurants.” The SIC search for Subway would be “Sandwiches and submarines shop.”
McDonald’s Franchise for Sale
McDonald’s has roughly 14,000 franchises in the U.S. alone, almost all of which are franchise-licensed.
In Reonomy, you can search by Tenant name “McDonalds,” by tenant NAICS code, “Limited-Service Restaurants,” or SIC code, “Fast-food restaurant.”
From there, you can dive into the property’s sales and ownership info to begin making an informed pursuit of the property and gauge whether or not it’s likely to sell.
McDonald’s also offers an online application form on their website that you can fill out to begin the process.
7 Eleven Franchise for Sale
To find 7 Eleven franchises for sale, you can again search Reonomy in a similar fashion to that of the Dunkin’ Donuts example included above.
The only notable change would be the NAICS or SIC codes, which when searching for a 7 Eleven to invest in, would both be “Convenience Store(s).”
Another option is to visit 7 Eleven’s webpage specifically geared towards searching available U.S. franchise opportunities. On the site, you can choose the state you’d like to search in (since the chain is not in every state nationwide).
7 Eleven’s franchise application form can be found online as well.
Domino’s Franchise for Sale
Other than Pizza Hut, Dominos is the largest pizza franchise in the U.S. in terms of number of locations, with more than 5000 in total, most of which are franchise-licensed.
To find a Dominos to invest in using Reonomy, your NAICS code would again be, “Limited-Service Restaurants,” and your SIC code, “Pizza restaurants.”
You can also apply to “own a piece of the pie,” by filling out the Dominos franchise application form, which can be found on their website.
Find Properties by Tenant Type
Cleaning Franchise for Sale
Aside from searching for specific business names on Reonomy, you can also search for a specific business or tenant types.
This is typically easiest to do by using the SIC code search option in the Tenant tab.
So, if you were looking for a cleaning franchise for sale, for example, you could go visit the Tenant Type search bar, select “SIC,” and enter the relevant code, such as “carpet and upholstery cleaning,” or “cleaning services.”
Once you’ve added a filter, you can begin narrowing your search down by the location you’d like to search in, if any. Search on a city level, county level, neighborhood-level, by street name, or exact address.
After that, you can analyze the Tenant tab of individual property pages to see who the exact cleaning service tenant is and get their contact information.
Gas Station for Sale
Another example of searching by tenant type would be to search for a gas station property.
Given the fact that the property type falls under broader asset type classifications (convenience/service station/retail), you can use Reonomy’s tenant search tool to search specifically for gas stations, and if you choose, search for a specific gas station tenant.
You can also analyze individual gas stations to see other tenants, and see whether there are also coffee shops, retail, or restaurants on the same property as the station.
Get Property Owner and Tenant Contact Information
Once you’re in the midst of property research and analysis on Reonomy, it’s also very easy to access the owner details and contact information, as well as the contact information of the tenants.
In our Dunkin’ Donuts example from above, you’ll see how to access the contact information of tenant decision-makers.
To find property owner contact information, within individual property profile pages, you can visit the Ownership tab. There you’ll see the reported owning entity (LLC or individual name), along with contact information of the individual owner or individuals associated with the owning LLC.
Find Franchises for Sale with Commercial Listings
While Reonomy gives you access to information on every commercial property in the U.S., you can also turn to online commercial listings platforms to find properties that are actively being listed for sale.
BizBuySell has roughly 45,000 active business for sale listings across the U.S.
For investors looking specifically for a franchise for sale, BizBuySell does offer a search for franchise opportunities only.
Within their franchise opportunity search, there are many categories that you can select, from automotive, to pet-related, to retail, food and restaurant, cleaning services, and much more.
Franchise for Sale by Owner
When it comes to listings, the closest thing to an off-market search would be to search for properties that are for sale by owner (FSBO).
While Reonomy grants you near-unlimited access to franchise properties, you can use websites like businessesforsale.com and businesssmart.com to search for franchises that are actively being listed for sale by owner.
Whatever the case may be, however, you can use Reonomy to identify investment opportunities, franchise or not, anywhere in the nation, with just a few clicks.