With hundreds of new franchises debuting each year, another factor is determining whether a concept has staying power. Investing in a new franchise concept, which typically will have lower investment costs, can be a good idea, but carries its own risks.
“If you buy a franchise that is brand new and no one has ever heard of, you take on all the risks of that franchisor potentially not being very good at what they do in terms of operations,” York said. “They may have a good idea, but they haven’t established any brand equity. They haven’t tested their operating procedures for any length of time.”