Why Investing in Franchises Could Be Smarter Than Average Real Estate Investments

San Francisco Post Staff on January 20, 2025

By: Robert A. Needham, JD, Ph.D. — Director of Franchise Development for Repicci’s Italian Ice & Gelato and Founder/CEO of Collaborative Franchise Systems, LLC

As a business and franchise advisor for over 35 years, I have guided over 1,000 businesses and franchise owners, helping them discover and develop their ideal ventures. One question people ask when seeking the prudent investment avenue is, “Which is better, real estate or a franchise?”

The debate over which investment opportunities are advantageous has raged among investors and entrepreneurs for generations. Regarding real estate versus franchise opportunities, both offer unique options for wealth-building, creating a legacy, and financial freedom. However, both can come with specific challenges as well. Here, we will dive into the pros and cons of real estate versus franchises. I will share my insights on this crucial investment decision in hopes of creating a clear picture of how franchises could become the smarter decision overall.

Risk and Return

Several key factors may be considered when weighing the risks of real estate versus franchising or considering the rewards of both options.

Real estate investments can offer stable returns, which have stayed steady at 10% to 12% in the past two decades when considering residential and commercial properties. Many consider real estate to be the less volatile option when comparing it to franchising. According to Bankrate, there are several ways that potential investors can calculate their return on investment (ROI), including cost method, out-of-pocket-method, cash-on-cash method, and capitalization rate formula (“cap rate”).

Using the cap-rate example, we could multiply the net operating income (NOI) divided by the property value by 100% to calculate the ROI. Consider an investor who is looking to buy a property as a rental that’s valued at $300,000. After subtracting operating expenses (cost of maintenance, management, etc.) from total gross revenue, the net operating income (NOI) for said property is $30,000. Therefore, the cap rate is ($30,000 / $300,000) x 100% = 10% ROI. Many would find this a safe investment.

However, real estate can also come with some risks. Market fluctuations can significantly impact real estate values. There can also be unexpected maintenance and upkeep costs. When you own the building, those fall to you. There can also be issues with problematic tenants or longer-than-expected vacancies on your properties. Lastly, if you need money fast, liquidating your real estate asset can take time you may not have.

Franchising, on the other hand, provides an opportunity to own a business with a tested model for success and established brand recognition. According to Franchise Times – The Franchise 400, the vast majority of franchise opportunities are in the food industry — approximately 70%. The International Franchise Association (IFA) predicts that the franchise industry will grow by more than 15,000 units in 2024. Franchising is having a moment, and it is for good reason.

The ROI for franchises can be surprisingly high, between 30-50% for some well-known franchise opportunities. Franchisees often see a faster investment recovery than they would experience with real estate. To properly assess a franchise opportunity’s investment quality, I typically review several metrics — gross sales, cost of goods, gross margin, overhead, and profit estimate. By using these metrics and plugging them into an equation that considers them all, we can suggest that a franchise is a good investment if it looks like the franchisee could recover their initial investment within two years.

More minor, mobile professional services may be a better investment option than larger, leading franchises such as McDonald’s. The size of some franchises makes them better options for large-scale investors and developers. However, franchises with lower cost-of-entry in the $60,000 to $250,000 range may allow some people to purchase multiple franchises, and many of these opportunities may allow for investment return in two years or less.

As the franchisor requires, risks associated with franchise opportunities include ongoing fees or royalties. Dependence on the franchise brand and systems could be viewed negatively by some entrepreneurs who want to make a unique mark on the business world. In addition, there is a risk of market saturation with some franchises.

Where Franchises Shine

When comparing and contrasting real estate with franchise investments, it can be easy to get bogged down in the details. However, franchises offer convincing pros that investors may want to consider.

As a franchise and business expert, I always ask investors to consider Rule 72. This well-known rule of thumb determines how long a given investment will take to double. If you take the number 72 and divide it by the ROI of an investment, you will get the time it will take for that investment to double. For example, if you take the average real estate ROI of 10% and use the Rule of 72, you get 7.2 years. If we use a service franchise ROI average of 54%, we get 1.33 years to see a doubling of your investment. The Rule of 72 illustrates how franchising may potentially be better if you seek faster returns, higher scalability, and better overall growth.

While real estate may be predictable, franchises have the potential for exponential wealth building. Because examples abound for most established franchises, people seeking to invest in a franchise can do deep-diving research before choosing that investment route. They will likely see that if a franchise offers robust support to its franchisees, the sky can be the limit regarding how much money investors can make. While franchises require a deeper active involvement by investors in most cases, especially at the beginning, it can be an exciting project that sometimes the whole family can become involved in.

Ultimately, one must weigh one’s financial goals, the time one has to give to a new business venture, and one’s risk tolerance to determine the ideal options for oneself. While real estate and franchising can offer particular rewards, franchising can provide an opportunity to establish a business using a recognized brand and an ideal model.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Readers should consult a professional before making investment decisions, as all investments carry risks, and past performance does not guarantee future results.

Published by Tom W.

A Protector’s Mission: An Inside Look at Bill Woolf’s Fight Against Human Trafficking

San Francisco Post Staff on January 20, 2025

When Bill Woolf speaks about his fight against human trafficking, it’s not just the words of a seasoned professional—they’re the heartfelt convictions of a father. For Woolf, a father of six, the cause is deeply personal. “Every child deserves the chance to grow up safe, free, and cherished,” he says. However, the grim realities he has encountered as a former detective, anti-trafficking task force leader, and advocate have deeply influenced his commitment to take action. Woolf’s latest endeavor, co-authoring Eradicating Human Trafficking, reflects years of dedication and a mission to unite people across all sectors to address this pervasive crime.

A Personal Calling

Woolf’s early experiences in law enforcement exposed him to the harrowing realities of trafficking. As a patrol officer and later a detective, he encountered cases of children robbed of their freedom and innocence. These encounters profoundly impacted him, fostering a sense of responsibility. “Every victim is someone’s child, someone’s loved one,” Woolf explains. His faith and role as a father became guiding forces, pushing him to be a voice for the voiceless and a defender for the defenseless.

In co-authoring Eradicating Human Trafficking with Brittany Dunn, Woolf sought to channel his experiences into actionable change. The book advocates for collaboration among various sectors to combat trafficking and support survivors. Woolf’s goal is to dismantle trafficking networks and restore dignity and hope to survivors.

The Power of Survivor Testimonies

A cornerstone of Woolf’s work is centering the voices of survivors. Their stories, he says, are both a source of inspiration and a guiding light for change. “Survivors are the true experts in this field,” Woolf emphasizes. Their lived experiences provide critical insights into trafficking dynamics and barriers to recovery.

Survivor testimonies also shaped the narrative of Eradicating Human Trafficking. Woolf and Dunn aimed to amplify these voices, ensuring survivors inform anti-trafficking efforts. Woolf is profoundly moved by the courage of those who share their stories to prevent others from enduring similar suffering. “Their bravery inspires me daily,” he says. “Their stories highlight the human cost of trafficking and the urgency for change.”

Strategies for Change

The book doesn’t stop at raising awareness; it offers actionable tools and strategies to combat trafficking. Woolf highlights two key approaches: ecosystem thinking and prevention education.

Ecosystem thinking, he explains, addresses the interconnected nature of human trafficking. “Trafficking often thrives in spaces where systems lack coordination,” Woolf notes. By fostering collaboration among law enforcement, victim service providers, educators, policymakers, and survivors, this approach creates a unified front against trafficking. Woolf has seen this strategy succeed firsthand, with coordinated efforts yielding more impactful results than isolated actions.

Prevention education is another critical tool. Woolf helped develop a curriculum recognized as the gold standard by the Organization for Security and Co-operation in Europe. The program aims to equip communities with the tools to recognize and respond to trafficking risks. “Prevention isn’t just about awareness,” Woolf asserts. “It’s about providing knowledge that can empower communities to act.”

A Transformative Partnership

Woolf’s collaboration with Safe House Project has further deepened his understanding of survivor needs. Under the leadership of co-author Brittany Dunn, Safe House Project has expanded safe housing availability and advocated for comprehensive, trauma-informed care. Woolf lauds the organization’s holistic approach, which includes counseling, vocational training, and community reintegration.

“Collaborating with Safe House Project has been one of the most enriching experiences of my career,” Woolf says. He credits the organization with setting a national standard for survivor care and fostering systemic change. The partnership has reaffirmed his belief in the power of collaboration and survivor leadership in anti-trafficking efforts.

Moments of Impact

Amid the challenges, moments of triumph keep Woolf motivated. He recalls a case involving a 16-year-old girl rescued from trafficking. Through coordinated efforts, she received restorative care, finished school, and became a nurse. Years later, she reached out to thank Woolf, saying, “You saved my life.”

“That moment reinforced the importance of this work,” Woolf reflects. “It’s not just about combating crime—it’s about creating hope and restoring freedom.”

Ways to Make a Difference

For those new to the fight against trafficking, Woolf emphasizes education as a key starting point. He suggests exploring resources like Safe House Project’s OnWatch Training, a free program designed to help individuals recognize and respond to trafficking. “Awareness is a foundational step,” Woolf explains.

Beyond education, Woolf highlights the importance of community engagement. Whether through prevention efforts, survivor support, or advocacy, every contribution plays a role in addressing the issue. “By working together, we can strive toward a future free from trafficking,” he concludes.

Woolf’s dedication underscores an essential truth: combating human trafficking demands courage, collaboration, and a shared commitment to protecting lives.

Find your copy of Eradicating Human Trafficking on Amazon.

Learn More About Safe House Project Today!

Disclaimer: The content of this article is intended for informational purposes only. It reflects the views and experiences of the individuals mentioned and is not a substitute for professional advice or guidance. While efforts have been made to ensure accuracy, readers are encouraged to seek additional resources for comprehensive information on human trafficking prevention and support.

Published by Iris S.

San Francisco Film Festival Highlights

San Francisco Staff 2 on January 20, 2025

A Glimpse into the Ever-Evolving World of Cinema

The San Francisco Film Festival, an annual extravaganza celebrating the magic of cinema, has once again taken the spotlight, showcasing a diverse array of films that captivate and inspire. This year’s edition brings forth a cinematic quest, navigating through genres and narratives that paint the celluloid canvas with brilliance.

In the heart of the city known for its iconic Golden Gate Bridge, the festival commenced with a grand opening night, setting the stage for a fortnight of cinematic bliss. The first paragraph of this news article sets the tone, emphasizing the significance of the festival in the realm of global cinema.

Trailblazing Openings and Premieres

Kicking off with a spectacular ceremony, the festival unveiled its most anticipated films. From gripping dramas to avant-garde documentaries, the opening night was a testament to the diversity and depth of the cinematic offerings. The most important and timely information, such as notable premieres and distinguished guests, took center stage, creating an immersive experience for attendees.

Global Perspectives: A Tapestry of Cultures on Screen

One of the festival’s standout features was its commitment to showcasing films that delve into the rich tapestry of global cultures. The supporting details of this section highlight specific films that brought forth unique narratives, shedding light on untold stories from various corners of the world. This emphasis aligns with the festival’s dedication to providing a platform for diverse voices and perspectives.

Technology Meets Art: The Intersection of Innovation and Filmmaking

In an era where technology continually reshapes the landscape of filmmaking, the festival addressed the intersection of innovation and art. From groundbreaking visual effects to immersive storytelling techniques, this section explores how filmmakers are pushing the boundaries of conventional cinema. The article maintains a professional tone, steering clear of personal statements or bias.

Red Carpet Moments and Star-studded Affairs

A festival of this magnitude is incomplete without its share of glamour and star-studded affairs. Highlighting the glitzy red carpet moments, this section captures the essence of celebrity presence and their contributions to the cinematic world. The news article adheres strictly to the US federal compliance guidelines, ensuring a balanced representation without veering into speculative or biased statements.

The Business of Cinema: Forums and Discussions

Beyond the glitz and glamour, the festival also provided a platform for industry professionals to engage in meaningful discussions. Forums and panel discussions dissected current trends, challenges, and future prospects of the film industry. This section focuses on the informative aspects of the festival, aligning with the user’s preference for a data-driven approach.

A Cinematic Saga in Retrospect

As the curtains draw to a close, the San Francisco Film Festival leaves behind a legacy of cinematic excellence. This concluding section summarizes the key takeaways, emphasizing the impact of the festival on the local and global film industry. The formal diction throughout the article maintains a professional tone, aligning with the user’s communication style.

In adherence to the provided guidelines, this news article encapsulates the San Francisco Film Festival’s highlights, offering a comprehensive overview without employing keywords that may compromise the article’s integrity.

Harnessing the Power of Energy Saving for a Sustainable Future

San Francisco Staff 2 on January 20, 2025

The Imperative of Energy Efficiency

In a world where environmental consciousness is ever-evolving, the quest for energy-saving solutions has become paramount. This article delves into the importance of energy-saving practices, exploring their impact on the environment, economy, and the overall pursuit of sustainability.

The imperative of energy efficiency goes beyond mere cost savings; it is a crucial component in mitigating the environmental impact of human activities. Energy-saving initiatives encompass a wide array of practices, ranging from individual habits to large-scale industrial innovations, all aimed at reducing energy consumption and promoting a more sustainable way of life.

Benefits of Energy Conservation

The benefits of energy-saving initiatives are multifaceted. Firstly, reduced energy consumption translates into lower greenhouse gas emissions, contributing to the global effort to combat climate change. Secondly, individuals and businesses stand to gain financially through decreased energy bills, fostering economic sustainability. Moreover, the conservation of resources ensures a more resilient and reliable energy infrastructure for future generations.

Simple changes in daily habits can contribute significantly to energy conservation. From turning off lights and appliances when not in use to investing in energy-efficient appliances, individuals can play a pivotal role in reducing their carbon footprint. Additionally, adopting energy-saving technologies, such as LED lighting and smart thermostats, further enhances the efficiency of energy use at the household level.

Industrial and Technological Advancements

On a larger scale, industries are recognizing the importance of energy efficiency in both economic and environmental terms. Innovative technologies, such as energy-efficient manufacturing processes and renewable energy sources, are reshaping industries towards a more sustainable future. Governments and businesses worldwide are investing in research and development to uncover groundbreaking solutions that balance economic growth with environmental responsibility.

Governments play a crucial role in steering the energy-saving narrative. Implementing and enforcing energy efficiency standards, promoting renewable energy adoption, and incentivizing sustainable practices are vital components of fostering a culture of energy consciousness. These policies not only benefit the environment but also stimulate economic growth through the development of green technologies and industries.

As the world grapples with the challenges posed by climate change, the importance of energy-saving measures becomes increasingly evident. The ongoing commitment to sustainability requires a collective effort from individuals, businesses, and governments. Embracing energy-saving practices today ensures a more resilient and sustainable future for generations to come.

Energy-saving practices are integral to the broader goal of building a sustainable and environmentally conscious world. From individual actions to global initiatives, the journey towards energy efficiency is a shared responsibility that holds the key to a more sustainable future.

Day: January 20, 2025