Everyone has seen the ads plastered on billboards, buses and in convenience stores. They are filled with images of muscle-bound men and attractive women holding cylindrical cans of America’s new favorite beverage: energy drinks. Indeed, these caffeine-spiked drinks are beginning to outsell many sodas, and some statistics put the number of overall energy drink imbibers at around 100 million per year. Yes, it’s a booming industry, one that potential franchisers should certainly consider.
Those looking to franchise are usually doing so in order to mitigate the risks that come with opening a business alone. Therefore, it makes sense to look at franchise categories that are not only growing fast, but have the potential for future growth as well. To this end, energy drinks sales grew 55% per year since 2000, according to Sundale Research. This has led to a growth of 605 million gallons of the drink in 2013.
There are some other reasons energy drinks are shaping up to be a prime investment opportunity – here are just a few of them.
Low Startup Costs
There are people out there who invest hundreds of thousands of dollars in a single franchise. While many of these are certainly wise investments, energy drink franchises are equally wise and can be had at a fraction of the cost (usually $40,000 or less). This is because energy drinks are often sold via vending machine or kiosk, therefore there are no fixed-site expenses or training fees. On top of that, most energy drink companies already have established territories with full lists of retailers in the franchisee’s general area.
Assistance every Step of the Way
Many companies provide account liaison officers to help new investors get their franchises up on their feet. This also comes included with a wide array of POS (point-of-sale) materials the franchisee can use to gauge the lay of his or her land. It’s through this assistance that investors can feel confident hitting the ground running.
Those who decide to invest in an energy drink franchise often don’t have to worry about shipping/receiving logistics. That’s because most providers have in-depth maintenance control programs that allow for fully automated shipping and restocking; the franchisee hardly has to lift a finger in this respect.
High Profit Margins
High profits are the standard in this category due to a number of factors. Many energy drinks have high visibility and brand awareness due to their in-house media and public relations programs. These entities promote the product on a number of popular platforms, from television to sporting events. Many companies also have the resources to implement promotions programs as well as divert hundreds of thousands of marketing dollars back into the franchisee’s territory.
In the end, it’s the low overhead, low royalties and low initial startup fees that should prove attractive to anyone looking to invest in a franchise. Those who are interested in making the investment leap into the world of energy drinks can find more information on franchises here.
Isaac Morris is a professional blogger that provides tips and information on franchise opportunities and investments. He writes for FranchiseExpo.com, the place to find the best franchise opportunities available.