The very fact that you are considering buying a franchise means you want less risk than is involved in starting an independent business. To minimize your risk (but maximize your cost), you could buy an existing, operating, proven franchise outlet. Even if you succeed, you won't make a fortune, but your likelihood of making money at all will be significantly increased. Considering the probable cost of such a blue-chip franchise, you are likely to have to lay out a substantial amount of cash or take on a substantial amount of debt.

A more risky course of action would be to buy a franchise that has less of a blue-chip aura-with an accompanying reduction in price. The three elements that generally establish an individual franchise outlet's level of risk are the relative newness of industry, franchise, and market (location). So in general, a medium risk/cost/return franchise would have some elements of relative newness to one or more of those three categories.

Following the continuum to its logical end, we come to the riskiest-and, potentially, the most lucrative-type of franchise. In other words, these franchises represent a relatively high degree of newness in all three categories. (And, of course, theoretically, the riskiest franchise would be a completely new franchise in a completely new industry in a completely new market.)