Shy Town. The White City. The Windy City. Whatever you call it, Chicago is a great location for entrepreneurs thinking of owning a franchise business.
You’ve got all kinds of advantages. Central location. Economic powerhouse. Large and diverse population and talent pool. A business-friendly environment. It’s all right here in the nation’s third-largest metropolitan area.
Chicago’s Competitive Advantages for Franchise Investors
Size makes a major impact. If you’re in business in the nation’s third-largest metro, and the largest in that vast space between New York City and Los Angeles, you’ll find an audience for whatever goods or services you represent.
The population of Cook County alone is well over 5 million residents, and that’s only the largest of six counties that make up the metro. All of those people are consumers as well as potential employees, partners, or investors.
Then add to that the 55 million-plus tourists and visitors to the city every year, and you’ve got yourself quite a market for whatever you’re selling.
It’s an educated consumer group and workforce, too. Major universities in and around the city include Northwestern University, DePaul, Chicago University, Chicago State, and Loyola University Chicago, just to name a few sites of higher learning.
Regardless of your audience, you’ll find it here. If you buy a franchise with well-defined territories, you won’t have to worry about competing with other franchisees within the same organization. The market is yours — and it’s rich, diverse, and vibrant.
Top-Performing Franchise Sectors in Chicago
When you think of LA, your mind automatically goes to the entertainment industry. New York City might remind you of finance and publishing.
You’re not immediately reminded of any industry when you think of Chicago. And that’s an advantage. The diverse economy makes it resilient, robust, and protected from the downturn of any one industry.
Here are a few of the hottest franchise industries that thrive here and offer some of the best franchise opportunities in Chicago.
Food and Beverages
Remember those 55 million-plus visitors every year? They need food, beverages, and entertainment. Then there are the millions more who live and work here and who must also be fed and entertained.
That means everything from fast food franchises to the finest cuisine gives you a chance to thrive in Chicago.
Hospitality
Similar to the food and beverages industry, this is a business sector that millions need. On the upper end of the scale, you and your deep-pocketed investors might explore opportunities at Hyatt, Hilton, Embassy Suites, or Renaissance Hotels.
At the other end of the scale, explore franchising opportunities with Motel 6, Comfort Suites, or Holiday Inn.
The point is, opportunity knocks for franchisees interested in serving the overnight accommodation needs of millions of guests.
Insurance
Here’s an interesting fact: There are some 4.6 million privately owned registered motorized vehicles in Chicagoland. All of those cars, trucks, and motorcycles need insurance.
Then there are homes owned by millions of Chicago metro residents, and millions more in rental units. They need homeowners and renters insurance coverage. Then there’s life insurance, multiple forms of business coverage, and additional policies for consumers.
If you have a well-protected territory in the Chicago metro, you’ve got potential customers for every line you sell.
Another advantage of the insurance sector is that it’s a recurring revenue business model. That means that you’ll be paid a commission every time your policyholder pays a premium. If it’s a homeowners policy, you might be paid for years. Life insurance? That could result in commission checks for decades.
Service Industries
When you provide services to your client base, as opposed to selling them goods, you don’t have to invest in and store inventory. You’ll have gear and equipment, but your capital investment might be relatively small. You might be able to work from your own home rather than a space you must own or rent. And you might be able to work alone or with a very small work crew.
The service sector can be marketing anything from glass washing or carpet cleaning to senior care or tutoring. With the diverse population here in Chicago, you’ll find residents in need of just about every service you can think of providing — and your start-up costs might be very affordable.
Chicago Investment Requirements and Financial Considerations
You’ll find all kinds of franchises for sale in Chicago — at all price points. Start-up costs for founding any sort of business can be challenging. It’s no different with a franchise operation, though your capital needs can vary dramatically depending on the business sector, the popularity of the brand, and other factors.
One initial cost familiar to every entrepreneur who wishes to buy a franchise is the franchise fee.
Understanding Franchise Fees
Think of the franchise fee as your cost of entry. It’s the start-up cost the franchisor charges you for the right to call yourself a Taco Bell restaurant owner, a Hyatt hotelier, a Right at Home service provider, or a Freeway Insurance agent.
With the franchise fee, you get the company name and logo, the franchisor’s ways of doing business, and the right to sell your franchisor’s goods or services.
Franchise fees can range from a few thousand dollars to seven figures, depending on the strength and familiarity of the brand and other factors. Some franchisors will charge this fee immediately upfront, while others might let you pay over time. Some offer discounts for American military vets or for meeting other qualifications.
As soon as you meet the franchise representative, you should ask for details about the franchise fee. Ask about all of the start-up costs so that you’re not wasting your time if it’s financially beyond you.
Royalty Fees and How They’re Structured
What draws you to a particular franchise organization? Chances are, it’s your confidence in the goods or services that the organization provides. Whether it’s a Big Mac or the carpet cleaning process innovated by Stanley Steemer, you’re excited by what you’ll sell because you trust that your customers will be.
For every unit you sell — whether it’s a fast food meal, a tutoring service, or a life insurance policy — you’ll make a royalty payment to your franchisor because that’s who invented, innovated, or originated that unit you just sold.
Royalty fees can range between about 8 percent of the sale and 20 percent. Some royalty fees will be based on gross revenue, others on net profits. You might have to submit the payment soon after the sale, or perhaps on a monthly or quarterly basis.
Every royalty fee is structured differently, so it’s important that you see the details in writing and get all of your questions answered before you commit to any relationship.
Marketing Fund Contributions
The most dynamic franchise operations include smart and constant advertising and promotion. With all franchisees supporting the cost of a marketing program, the individual cost will be much smaller than the dollar value of the campaign and the results it generates. For that reason, your marketing fund contribution is a smart investment in your franchise’s own ongoing success.
Territory Protection Benefits
If you’ve made a smart franchise agreement, you basically own a parcel of metropolitan Chicago. This means you won’t have to compete for business from another franchisor within that territory. You’re not all fighting for the same customers.
A protected territory is of particular value in a market such as Chicago. Depending on where you locate, even a territory of just a few square blocks could gain you access to tens of thousands of potential customers or clients.
Get It in Writing
By law, every franchisor must provide interested investors with what’s known as a Franchise Disclosure Document. Your FDD puts the deal specifics in writing, addressing such topics as the franchise fee, the royalty percentage and structure, your marketing support payments, your territorial rights, and much more.
Read your FDD carefully, and let all of your financial advisors do the same. Get clear answers — also in writing — to any follow-up questions you ask, and listen to your advisors. If they tell you that this is an opportunity you should pass up, respect their viewpoint and hear them out.
Consider the Multiple Advantages of Investing in a Freeway Insurance Franchise in Chicago
At Freeway Insurance, we’ve got franchises for sale in Chicago. We’re eager to get smart and ambitious franchisees like you doing business with us in the Windy City. You’ll find it to be an appealing and dynamic market with a diverse audience and endless opportunity at an affordable investment.
In Freeway, you’ll find a franchisor with a known and trusted brand and a built-in audience for the products we offer. There’s no inventory to buy or store, and you can initially operate the business from your home and be your sole employee. That keeps your start-up costs down.
But first, you’ll get top-tier training and the confidence of having ongoing support whenever you need and want it. We’ll even help you identify and obtain the certification you’ll need to operate in the State of Illinois.
You’ll find us to be an ideal Chicago franchise opportunity, whether you’re a veteran entrepreneur or a first-time business owner.
To find out more, simply reach out to a Freeway Insurance franchise representative. Call us, with no obligation, at 877-822-3024. You can also give us your contact information, and we’ll contact you at your earliest convenience.
