Are you thinking about buying a franchise? The franchise industry continues evolving, with the International Franchise Association (IFA) reporting 2025 growth in essential services despite some sectors struggling. While some franchises offer steady profits and viable support, others only drain your savings with high fees, poor training, and shaky demand. This year, knowing the worst franchises to own could save you from a costly mistake.
In this guide, we’ll cut through the hype and share struggling brands to avoid as well as the thriving industries worth your investment. Whether you’re eyeing a restaurant, fitness, or healthcare business, we’ll help you make an informed decision by breaking down the risks and red flags. Let’s begin!
TL;DR: Best and Worst Franchises to Own in 2025
- Thriving Franchises: Home services (HVAC, cleaning), senior care, recession-proof food (discount pizza, healthy smoothies), and tech (EV charging, smart home installs) are top performers with strong demand and franchisee satisfaction.
- Avoid These: Struggling fast-food chains, boutique gyms, and outdated retail franchises often have high failure rates, hidden fees, and poor corporate support.
- Make sure to: Assess market demand, review the FDD, and research thoroughly by talking to current franchisees before investing.
What Makes a Franchise Bad to Own?
Not every franchise is a smart investment. Some come with hidden pitfalls that can turn a promising opportunity into a financial burden. Before diving into specific brands to avoid, let’s break down the key red flags that make a franchise risky:
- High Failure Rates
Several industries are notorious for franchise closures. Fast food, retail, and fitness chains often top the failed business models list due to fierce competition and slim profit margins. If a brand has a track record of frequent shutdowns, you need to think twice before signing up.
- Excessive Fees & Hidden Costs
Low initial franchise fees can be tempting—until you discover high royalty payments, mandatory supply purchases, or unexpected renovation costs. A franchise that drains profits with ongoing expenses is one of the worst franchises to own.
- Poor Corporate Support
A strong franchisor provides training, marketing, and operational help. If a large number of franchisees complain about a lack of support or slow corporate responses, the business may not be worth the risk.
- Market Saturation
Some industries, like sub shops or smoothie chains, are oversaturated. Even the best brands struggle when too many locations compete for the same customers. In this instance, research local demand before committing.
- Legal Troubles
Franchises with lawsuits, regulatory issues, or a history of unhappy franchisees should raise red flags. Make sure to check their Franchise Disclosure Document (FDD) for past legal problems.
If the franchise you’re looking to own has high failure rates, hidden fees, weak support, or legal headaches, it’s likely a bad bet. Next, let’s look into the worst franchises to own in 2025, so you can steer clear of costly mistakes.
The Worst Franchises to Own in 2025
Based on recent industry data and franchisee reports, the following are the franchise categories and specific brands you should approach with extreme caution in 2025:
Fast Food & Quick Service Restaurants
Despite being a seemingly ever-present and enticing sector, the restaurant industry has the highest franchise failure rates across all industries. This alarming statistic is a testament to the challenges and complexities even well-intentioned entrepreneurs face when venturing into food service franchising.
From razor-thin profit margins and intense competition to demanding operational requirements and fluctuating consumer trends, the inherent volatility makes it a high-risk proposition for potential franchisees, despite the appeal of a recognized brand and established operational models. In particular, these brands stand out as particularly problematic:
- Subpar Sandwich Chains: Multiple mid-tier sandwich franchises are struggling with declining sales and franchisee dissatisfaction. High food costs and royalty fees (often 8-12% of sales) leave little profit for owners.
- Burger Franchises with Identity Crises: Several second-tier burger chains are losing market share to larger competitors. Franchisees report slim margins and expensive mandatory remodeling requirements. Amazon-owned companies or private equity firms sometimes acquire struggling brands like these.
Fitness Franchises
Before the pandemic, many fitness franchises thrived on high-volume, low-cost memberships, often relying on long-term contracts and the hope that a significant portion of members wouldn’t consistently show up. However, the widespread closure of gyms during lockdowns forced many consumers to adapt to home workouts, virtual classes, and outdoor activities. This pivot highlighted the convenience and flexibility of at-home fitness solutions, which for many, proved just as effective, if not more so, than traditional gym memberships.
The post-pandemic fitness market has shifted dramatically, leaving some franchises behind and making them less attractive investments:
- Boutique Gym Concepts: Specialized fitness studios face intense competition and high overhead. Many require $300,000+ in startup costs but fail to deliver the promised membership numbers.
- Legacy Weight Loss Centers: Traditional weight loss franchises are losing relevance as consumers shift to digital solutions. Franchisees report difficulty hitting sales targets.
Retail & Service Franchises
Once considered safe and lucrative investments, these popular concepts are now fraught with significant risks, potentially leading to substantial financial losses and operational challenges.
- Printing & Shipping Stores: With digital alternatives dominating, some printing franchises see 15-20% annual revenue declines. High commercial lease costs compound the problem.
- Mobile Phone Repair Shops: As devices become harder to repair and warranties improve, these franchises face shrinking demand despite high franchise fees.
Key Warning Signs Across All Categories
- Franchisee turnover above 25% annually
- Multiple closures in the past 3 years
- Franchisee lawsuits or arbitration cases
- Required purchases from expensive approved vendors
While these are the worst franchises to own, other ventures offer much better opportunities. In the next section, let’s look at some of the industries that are most likely to franchise successfully in today’s market.
What Industries are Most Likely to Franchise Successfully in 2025
At present, several industries present as profitable enterprises for potential investors. These sectors combine growing demand with proven franchise systems — the perfect recipe for success:
Essential Home Services
Home-based franchises are experiencing a significant boom, driven mainly by homeowners’ increasing prioritization of maintenance and repairs. This trend reflects a broader shift in consumer behavior, where individuals are investing more in their living spaces, leading to a consistent demand for services that cater to home improvement and upkeep. They include the following:
- HVAC Services: With climate extremes increasing, HVAC franchises see consistent demand. Many require lower startup costs than food franchises.
- Residential Cleaning: Recurring revenue models make cleaning franchises particularly attractive. The pandemic permanently increased demand for disinfection services.
Health & Senior Care
As the baby boomer generation continues to age, the need for a wide range of services is expanding rapidly. This demographic shift creates a viable and consistent market for businesses focused on health and senior well-being.
The types of franchises thriving in this space include:
- In-home Care Services: Providing non-medical assistance like companionship, personal care, meal preparation, and light housekeeping for seniors who wish to age in place.
- Assisted Living and Memory Care Facilities: Operating specialized residential communities for seniors requiring varying levels of assistance, including dedicated units for individuals with Alzheimer’s or other forms of dementia.
- Medical Staffing and Equipment: Supplying healthcare professionals to various facilities or providing durable medical equipment and supplies for home use.
- Senior Transportation Services: Offering safe and reliable transport for seniors to appointments, social events, and errands.
- Wellness Programs and Fitness Centers for Seniors: These centers cater to the physical and mental health needs of older adults with tailored exercise classes, nutrition advice, and social activities.
The consistent demand, the non-discretionary nature of many of these services, and the fragmented market (especially in non-medical home care) present unique opportunities for scalable franchise models. Franchisees often benefit from established operational frameworks, marketing support, and compliance guidance in a highly regulated industry.
Recession-Resistant Food Concepts
While some food franchises struggle, these models thrive in any economy due to their inherent resilience and adaptability:
- Discount Pizza Chains: Value-focused pizza franchises continue gaining market share as consumers prioritize affordability.
- Specialty Coffee & Smoothies: Premium beverage concepts with drive-thru capabilities outperform traditional cafes.
Such franchises often benefit from diversified revenue streams, effective supply chain management, and a loyal customer base, allowing them to weather economic downturns and emerge even stronger. Their success is rooted in their ability to provide consistent value, convenience, and a familiar experience, making them a reliable choice for both consumers and prospective franchisees.
Emerging Tech Services
New franchise opportunities are rapidly emerging within the dynamic tech sector, driven by innovation and evolving consumer needs. These include exciting avenues, such as:
- Smart Home Installation: With the proliferation of smart devices—from thermostats and lighting systems to security cameras and entertainment hubs—more homeowners are looking to integrate these technologies seamlessly into their living spaces.
- EV Charging Stations: The global push towards sustainable transportation has significantly boosted electric vehicle (EV) sales, creating a corresponding demand for robust charging infrastructure. Tech franchises like these are ideal for entrepreneurs buying a business in high-growth sectors.
Additionally, the field of cybersecurity is ripe for franchise development, providing essential services such as data protection, network security, and incident response to an increasingly digital world. This expansion reflects a broader trend of technology permeating all aspects of life, creating a demand for specialized services that can be effectively delivered through a franchised model.
Key Advantages of These Industries
✔ Recurring revenue models
✔ Essential services (not discretionary spending)
✔ Lower failure rates than retail or restaurants
✔ Strong corporate support systems
Now that we’ve seen both the best and worst franchises, let’s examine specific franchise brands that are thriving in 2025, and why they’re succeeding where others fail.
Best Franchises to Own in 2025
After examining the worst franchises to own, let’s spotlight the brands that are crushing it in 2025. These franchises combine strong systems, growing demand, franchisee satisfaction, and proven business models, making them smart investments in today’s market.
Home Services
Pop-A-Lock (Locksmith Services)
Pop-A-Lock’s success is deeply rooted in the constant, unavoidable demand for locksmith services. Car lockouts, lost house keys, and commercial security breaches are emergencies that can happen at any time, day or night. This 24/7 need ensures a steady, non-cyclical demand for their services, making it a resilient business model even during economic downturns. Their extensive network and rapid response times also contribute to their strong reputation and customer loyalty.
Key Stats:
- Initial Investment: Ranging from $100,000 to $150,000 (inclusive of franchise fee, training, equipment, and initial marketing).
- Franchise Fee: Approximately $30,000.
- Royalty Fee: 7% of gross revenue.
- Advertising Fee: 1% of gross revenue.
- Average Annual Revenue (per unit): $350,000 – $500,000.
- Number of Locations: Over 400 nationwide.
- Years in Business: Established in 1991, with over 30 years of experience.
2025 Edge: This year, Pop-A-Lock is poised to leverage advancements in smart home technology and vehicle security systems. They are actively investing in training their technicians on the latest digital locking mechanisms, key fob programming, and integrated security solutions. This proactive approach ensures they remain relevant and indispensable in an increasingly tech-driven world.
Window Genie (Window Cleaning/Repair)
Why It’s Thriving: Unlike many service-based franchises that rely on one-off jobs, Window Genie focuses on securing residential contracts for repeated window cleaning, tinting, and pressure washing services. This approach builds a predictable income stream, which is highly attractive to franchisees looking for stability and long-term growth.
Key Stats:
- Franchise Fee: Approximately $40,000 – $60,000
- Total Investment: $90,000 – $200,000 (including working capital, equipment, and initial marketing)
- Royalty Fee: 6% of gross revenue
- Advertising Fund Contribution: 2% of gross revenue
- Number of Locations: Over 250 across the U.S.
- Average Annual Revenue per Franchisee: $350,000 – $700,000 (varies based on location and operational efficiency)
- Growth Rate: Consistently expanding with new territories opening annually.
2025 Edge: The increasing demand for professional home maintenance services, driven by busy homeowners and an aging population, presents a significant market opportunity. Window Genie’s established reputation for quality and reliability, coupled with its proven marketing strategies, will allow it to capture a larger share of this growing market. Its focus on diversifying service offerings beyond just windows, to include pressure washing, gutter cleaning, and holiday light installation, provides additional revenue streams and increases customer lifetime value, ensuring continued profitability and competitive edge.
Funding Tip: Many home service franchises qualify for franchise business SBA loans due to their recession-resistant models.
Health & Wellness
Right at Home (Senior Care)
Why It’s Thriving: The demographic shift of Baby Boomers reaching retirement age continues to fuel the senior care industry. With approximately 10,000 Baby Boomers turning 65 every day in the US, the demand for in-home senior care services is experiencing unprecedented growth. This age wave creates a consistent and expanding client base for the franchise, which focuses on assisting seniors with daily living, personal care, and specialized health needs.
Key Stat(s): The global senior care market is projected to grow significantly, with a CAGR (Compound Annual Growth Rate) estimated to be around 8-10% in the coming years. In the US alone, the home care market is expected to reach hundreds of billions of dollars.
2025 Edge: Right at Home is increasingly leveraging technology to enhance care delivery and operational efficiency. This includes remote monitoring systems, telehealth solutions, and digital platforms for care coordination and family communication. This focus on innovation positions them to meet the evolving expectations of seniors and their families.
Funding Tip: Senior care franchises often require upfront staffing costs. Consider an unsecured business line of credit to cover initial payroll.
Stretch Zone (Assisted Stretching)
Why It’s Thriving: In an increasingly health-conscious society, Stretch Zone has carved out a unique niche by offering a service that bridges the gap between traditional fitness and therapeutic recovery. It caters to a broad demographic, from professional athletes seeking enhanced performance and quicker recovery to office workers battling the aches and stiffness associated with sedentary lifestyles. The appeal lies in its promise of improved flexibility, reduced muscle soreness, increased range of motion, and overall well-being, all delivered through a professional, one-on-one assisted stretching experience.
Key Stats:
- Franchise Units (2024 Est.): Over 250 locations across the United States, demonstrating rapid expansion and market penetration.
- Average Unit Revenue (2023): Approximately $600,000 – $800,000, indicating strong financial performance for individual franchises.
- Initial Investment: Ranges from $150,000 to $300,000, covering build-out, equipment, initial marketing, and working capital. This relatively accessible entry point makes it attractive to new franchisees.
- Growth Rate: Consistently listed among the fastest-growing fitness and wellness franchises, with year-over-year unit growth exceeding 20% in recent years.
- Customer Retention: High customer retention rates, often above 70%, suggest strong client satisfaction and recurring revenue streams through membership models.
2025 Edge: Stretch Zone’s established brand recognition and proprietary “WrapAround Stretching” methodology provide a significant advantage in a growing but increasingly crowded wellness market. This unique technique, focused on neuro-muscular re-education, sets it apart from competitors.
Food Franchises
Slim Chickens (Fast Casual Chicken)
Why It’s Thriving: The brand has cultivated a strong following, particularly among families and younger demographics, focusing on fresh, never-frozen chicken and a diverse menu of 17 dipping sauces.
Key Stats:
- Growth: Slim Chickens has experienced rapid expansion, boasting over 200 locations across more than 30 states and international markets, and plans to continue aggressive growth.
- Average Unit Volume (AUV): While specific figures vary, industry reports indicate healthy AUVs for Slim Chickens franchises, often exceeding industry averages for fast-casual concepts, demonstrating strong revenue potential.
- Investment Range: The initial investment for a Slim Chickens franchise typically ranges from $1,000,000 to $2,500,000, including build-out costs, equipment, initial inventory, and working capital. This investment level is competitive within the fast-casual segment.
2025 Edge: Slim Chickens’ commitment to technology integration, including robust online ordering platforms and loyalty programs, will enhance customer convenience and engagement. The brand’s ongoing menu innovation, exploring new flavor profiles and limited-time offerings, will keep the concept fresh and appealing.
Clean Juice (Organic Smoothies)
Why It’s Thriving: Clean Juice’s growth is primarily fueled by the increasing health consciousness among consumers, particularly Gen Z. This demographic’s strong preference for organic, natural, and nutrient-dense food and beverage options has directly contributed to a remarkable 30% surge in sales. The brand effectively taps into the wellness trend, offering products that align with a lifestyle focused on clean eating and overall well-being.
Key Stats:
- Average Annual Sales Growth: 30%
- Number of Locations (as of late 2024): Over 100
- Average Unit Volume: Higher than the industry average for similar quick-service beverage franchises.
- Franchisee Satisfaction Rate: Consistently above 85%, indicating strong operational support and a profitable business model for its owners.
- Investment Range: Initial investment typically ranges from $250,000 to $500,000, covering build-out, equipment, initial inventory, and franchise fees.
2025 Edge: Clean Juice has invested heavily in its digital platforms, including a user-friendly app for mobile ordering, loyalty programs, and engaging social media campaigns. Their marketing efforts effectively highlight their products’ health benefits and organic nature, resonating deeply with their target audience.
The brand has also demonstrated a strong ability to adapt to evolving dietary preferences and health trends, ensuring its offerings remain relevant and in demand in the ever-changing health food landscape.
Emerging Tech Franchises
Payroll Vault (Small Business HR)
Why It’s Thriving: Small and Medium-Sized Businesses (SMBs), often using in-house HR, struggled with dispersed workforces, multi-state taxes, varied labor laws, and complex remote onboarding/offboarding. Payroll Vault filled this gap with specialized HR and payroll solutions, simplifying these challenges and allowing SMBs to focus on core operations amidst a flexible workforce.
Key Stats:
- Franchise Units: > 100 locations across more than 30 states.
- Average Revenue Per Unit (ARPU): The reported average annual revenue per franchise unit is approximately $350,000 to $500,000, varying based on market size and client base.
- Growth Rate: Experiencing a consistent annual growth rate of 15-20% in new franchise unit sales and client acquisition, demonstrating strong market demand.
- Client Retention: Boasts a high client retention rate of over 90%, indicating strong satisfaction with their service offerings and a stable recurring revenue model for franchisees.
- Initial Investment: Ranges from $50,000 to $100,000, making it an accessible entry point for new franchisees compared to other industries.
2025 Edge: Payroll Vault’s continued investment in reliable cybersecurity measures will be a critical differentiator, assuring clients of the utmost data protection in an increasingly vulnerable digital landscape.
Key Takeaways
The franchise landscape in 2025 offers both incredible opportunities and costly pitfalls. While some brands represent the worst franchises to own due to high failure rates and poor support, others—particularly in home services, healthcare, and essential food sectors—are thriving. The key is thorough research, understanding market demand, and aligning with franchisors that offer real value to their owners.
Ready to Take the Next Step?
If you’ve identified a strong franchise but need funding to get started, we can help. At SMB Compass, we specialize in franchise business loan solutions tailored to your needs.
Apply now and turn your franchise ownership dreams into reality. Contact us for a free consultation today!
