As a franchise consultant, I have a lot of options to work with — right now, over 600 franchises across 30 to 40 industries. But “available to me” and “a good fit for the people I work with” are two very different things. There are some businesses I treat as flat non-starters, and others I’d only recommend under a very specific set of circumstances.
I’d rather be honest about what I steer people away from than pretend everything is a winner. So here’s where I tend to put on the brakes.
Businesses where you never actually own anything
One of the biggest reasons to own a business is to build an asset — something you can eventually sell, restructure into a semi-absentee model, or pass to your children. So I get cautious whenever the structure means you don’t truly own your location.
There are concepts out there (I’ll leave the names out) where, if you ever leave, you don’t have anything to sell. You just walk away. To me, that defeats one of the main points of ownership in the first place.
I’ll give you a real example of why I dig into structure. I once had a brand in the healthcare space that pushed a master franchise model — you’d build and run an entire region, earn a piece of the franchise fees and royalties from the franchisees you brought in. On paper, a strong model. Then I happened to be talking with someone at their home office and learned their actual intention was to not renew those master agreements past a certain point and take the regions back as corporate-owned. Meaning the person who poured in their time and money to build that region would be left with nothing. That was the last time I ever referred them to one of my candidates.
This is exactly the kind of thing a consultant is for — to ask the questions and dig past the brochure. Take the free Quiz and let’s start with brands that actually fit you.
Restaurants (most of the time)
In most cases I don’t steer people toward restaurants. The exceptions are folks who already have restaurant experience, or who want one so badly they won’t be happy with anything else — and even then, I’ll usually try to talk them out of it first.
Here’s why. The reason a lot of people think they want a restaurant is that they love firing up the grill on Sunday and making a great steak. What they’re not picturing is cooking 150 meals a day, every day, while managing staff and running the whole operation at the same time. It’s a different universe.
Restaurants are also genuinely tough as a category. Industry data has long shown restaurants fail at higher rates than most small businesses, and they tend to resell at lower values than the average small business. There are plenty of other businesses with a smaller upfront investment that reach their footing faster — without the brutal hours.
Dry cleaners
Dry cleaning is a high-risk one for reasons most people never consider. Buying an existing dry cleaner can come with serious environmental liability — you can be on the hook for remediation costs, sometimes even for third-party issues. On top of that, the equipment has a short lifespan compared with a lot of industries, the ongoing expenses are heavy, and these businesses tend to sell at low valuations. That’s a lot of risk stacked in one place.
The real point
These aren’t the only businesses I’m careful with, and honestly, the “right” answer depends heavily on your background and experience — a business that’s wrong for one person can be a great fit for another. That’s the whole reason to work with a consultant who’ll tell you the truth, including when the answer is “not this one.” My job is to help you find options with a real chance of fitting you, and to keep you out of the ones that don’t.
Key takeaways
- Be wary of structures where you never truly own your location — there’s nothing to sell when you leave.
- Read the fine print on master franchise models; ask whether the franchisor can take regions back.
- Restaurants are demanding and high-failure; usually only worth it with real experience or genuine passion.
- Dry cleaners carry environmental liability, short-life equipment, and low resale values.
- The right fit depends on your background — which is what a consultant helps sort out.
Frequently asked questions
Are restaurant franchises always a bad idea?
Not always — but they’re demanding and have higher failure rates than many categories. I generally only recommend them for people with restaurant experience or a true, eyes-open passion for the work.
What’s a red flag in a franchise?
A structure where you don’t own a sellable asset, anything that obscures real costs (a good FDD won’t), and models where the franchisor’s long-term incentives don’t line up with yours.
How do I avoid choosing the wrong business?
Work with someone who’ll be honest about fit, compare multiple options side by side, and read the FDD carefully. That’s exactly what I help with — at no cost to you.
Want help avoiding the wrong fit? Take the free Quiz for a personalized shortlist, or book a no-pressure call — or call the office at 813-333-5553.
This article is general educational information, not financial, legal, tax, or investment advice. Enterprise Franchising does not make earnings claims.
