Would buying or setting up a business from a well-known franchise brand be a guarantee that it will be financially successful?

While buying a well-known brand with strong systems will go a long way towards putting to on the road to financial success, it is not in itself a guarantee.

The profitability of individual franchises in a franchise system can differ a lot. In the case of a retail franchise for example, factors like location, competition, the rent they pay as a percentage of total turnover, wages and cost control will influence how profitable a particular franchise is.

Better management, good location and higher turnover and GP margin would make the franchise business more profitable, compared to other franchises in the group.

Paying too much in rent, poor cost control, not making use of collective purchasing benefits, bad or non-existent local marketing, lack of owners involvement, shrinkage or strong competition are all factors that can lower the business profitability compared to others in the same franchise.