A new and exciting group of emerging franchise opportunities are charging into 2022 full force
The franchise market is such an exciting and great way to keep tabs on the small business community. Due to the nature of small businesses, it’s hard to really know what is happening in each community and each industry segment until long after trends and changes in the markets have happened. All too often, long after there would have been time to take action and grab one of those market opportunities. The franchise market is one of the unique markets within the small business community that does consolidate data, trends, and market opportunities. If an investor plays his cards correctly, the opportunity to capture one of these market trends early enough is not only created by the franchise model, but so does the opportunity to scale that investment. Once a great market opportunity is uncovered, the best franchise investors find ways to go deeper and bigger with brands they understand.
So what are the franchise trends for 2022? To begin, for those of you who are not involved in the franchise market and didn’t live through the COVID-era of the franchise industry, things have been very good for the market. There has been an enormous push towards entrepreneurship by in large, with droves of employees either losing jobs or just deciding they don’t want to work for someone else any longer. Many have taken the first steps towards starting their own business and being their own boss. According to the U.S. Census Bureau, 2021 has seen about 50% more new businesses start in the U.S. than in any year in history. And 2020 is second on that ranking list. In what seems like a bit of an ironic twist, the pandemic has created a whirlwind of entrepreneurial activity and, as a result, sped up growth for many new and existing franchise brands.
Not all industries are created equal. One of the unfortunate trends that has shown up with the pandemic is that some businesses just don’t work in a COVID-era market and have suffered tremendously or even gone out of business. For most in this category, it was really to no fault of their own; they just had a model that wasn’t designed to withstand the unforeseen circumstances COVID has thrown at us. Some fitness models, like big box gyms, dine-in restaurants, co-working franchises, and others have had a difficult time throughout the past year and likely have a tough hill to climb in 2022. But other business models like delivery foodservice brands, boutique fitness models, and service franchise offerings have benefited significantly from the pandemic-created business environment. Let’s break down each of them and talk about some specific emerging franchise opportunities that have taken the bull by the horns and are charging into 2022 full force.
I personally have very high expectations for what this year will produce for entrepreneurs.
Food franchises
Delivery food service, or “off-premise” food service brands were on the rise before COVID crashed the party. After this happened, the demand for delivery food service has skyrocketed. Pizza franchises have won the lottery in many ways (check out Domino’s Pizza stock). These business models were designed and positioned for delivery-focused franchise models and virtually all of them have done well since COVID. Some early-stage franchise systems such as Chicago Pizza with a Twist (184 Stores), Curry Pizza House (14 Stores), and Marco’s Pizza have all expanded their market footprint and increased average unit volumes. This extends to other foodservice brands as well which focus on delivery, drive-through, and other versions of off-premise options. Within the food segment, I personally LOVE the coffee segment. There is so much to talk about here when it comes to new and exciting coffee franchises. The drive-through model has created absolutely mind-blowing ROI’s for franchisees. Take a look at Foxtail Coffee (40 Units), a new brand, Café Moka, Local Coffee, a New Jersey coffee brand, and a South Florida coffee brand Urban Buzz. All of these get me jittery when it comes to growth potential and what will happen for them in 2022. Also on the rise is the Boba Tea model, which seems to be going through a resurgence in popularity with some extremely impressive sales growth and franchise brands that have come to market recently. This includes Teaspoon, a 50-unit chain out of Northern California that is adding a new store just about every week. I am also very excited about Braganza Tea, a nine-unit chain in the Pacific Northwest. Their model just couldn’t be put together any tighter or be more geared for growth.
Service franchises
I also love the service segment of franchising going into 2022. People are spending more….WAY more on their homes now, and that doesn’t seem to be slowing down. With that, things like painting (check out Roman Paint), roofing (take a look at Armor Shield Roofing), and fencing (I love Big Jerry’s Fencing) are all booming and breaking sales records. Service models tend to be on my favorite list in general because you can easily illustrate a strong potential ROI with low start-up and higher operating margins. Now the spotlight is on this group, and any potential franchise investor should take notice. Some others that fall in this category that deserve praise include No-H20 (a mobile car wash franchise founded by an Irish Race Car Driver – no, you can’t get any cooler than that) and Bloomin Blinds, a 75-unit franchise out of Texas which is in the blind sales and repair industry. This category is so full of opportunities, I could write for quite a while longer. Instead, start doing your research, and I would recommend paying close attention to the services segment of the franchise industry.
In reality, 2022 will be a great year for growth and I personally have very high expectations for what this year will produce for entrepreneurs. Franchise trends for 2022 are truly exciting. If there has ever been a time where you could justify taking the leap into an emerging franchise opportunity, now is it. Guys like me who have been in the industry for years and love talking about franchise opportunities are all over the place. So if you need help, find one of us and have a talk about it. With some planning, 2022 could be your year!