Hot Trends in Franchising for 2023

2023 Franchise Trends

Home Services, Wellness, and Food Franchises Lead the Way in Top Franchising Categories

As we close in on 2022, it’s hard to believe another year has passed in life and in the franchise market timeline. So much has happened since the pandemic, and we are just about three years removed from that fateful March of 2020 when the world as we knew it was changed forever with masks, social distancing, and the fear and uncertainty that Covid-19 brought to us without warning.

Since the pandemic, franchising trends have been shaped by resilience. What has been a pleasant surprise is the ingenuity, innovation, and constant fight in small business owners who wouldn’t let the pandemic derail their vision and dreams. Franchising is a wonderful example of entrepreneurship and how creative business owners can be when their hand is forced to make a change.

Last year, The International Franchise Association predicted franchise growth would stabilize in 2022, expanding by 2.2% to reach 792,014 franchise establishments, 17,000 more than 2021. That may have been a conservative estimate. From what I have seen, the growth in franchising overall has been nothing less than spectacular. At Franchise Marketing Systems (FMS), we have seen brands grow at 50-100% per year since 2020. 

The opportunity for growth has been created largely by access to capital and an extreme influx of qualified franchise investors coming into the market in droves, deciding to take the leap into entrepreneurship for the first time. Even with a looming recession, franchising remains a compelling investment. But where does the market go in 2023 and beyond as we settle into the new normal for business and franchising? Below we look at some of the top franchise categories for 2023 and what they offer.

Top Franchising Categories for 2023

Home Services

For one, the pandemic did not affect all businesses equally and some segments have either evolved and changed significantly or altogether disappeared, while others have performed better and been strengthened by the new consumer trends created by the pandemic. Home services certainly came out the winner, and it’s hard to see that changing much in the coming years. The industry was driven by strong unit economics, lower investment business models, and a naturally scalable franchise model for both the franchisor and the franchisee (Just get more trucks on the road!).  

Many home services franchises were treated as the “step-children” of franchising before this meteoric market shift.

Home services is a broad category that includes roofing, painting, landscaping, fencing and so many other market categories. Many home services franchises were treated as the “step-children” of franchising before this meteoric market shift. Brands such as Bloomin Blinds, No-H2O, All Dry Restoration, Men in Kilts and Showhomes Home Services had their best years ever in growing their franchise system during the 2021 and 2022 time periods. We’ve also seen the emergence of some amazing service brands and new franchise systems come to market, including mobile grooming service franchise, Groom Service, event planning service franchise, Touch the Sky, custom fort builder, FireFly Forts Franchise and kitchen remodeling brands such as Fresh Faced Cabinets. 

We see 2023 as a continued year of growth, expansion and opportunity for many home-service brands. The numbers are too compelling. The average homeowner continues to invest generously in their home and so many great brands are getting traction in their industry segment.

Wellness and Medspa Services

Next, we’ve seen a massive increase in interest, demand and growth in the wellness and medspa services market. So much so, it’s become one of the most prolific segments in the entire franchise industry. In many ways, this market segment was created and defined by brands like Massage Envy and European Wax Center. But today, there are so many new brands, new ideas and new approaches to the medspa franchise market. There is seemingly never-ending innovation and new, great franchise brands pop up almost every month. Infinity medspa would be one, Le Corps Bodysculpting, skoah facial shop and Pause studio to name a few, are all excellent examples of new and emerging wellness service franchise brands. 

Helping people look and feel better about themselves will always be a good business.

The margins are excellent, the demand is growing and there is a strong play for a recurring revenue model with membership-based beauty services offered from a high-quality service model. Helping people look and feel better about themselves will always be a good business. No matter what else is happening in the world, people will always spend money to feel and look better. The investment range for these models tends to be on the higher end, but the margins and return on investment is absolutely there with the right franchise offering. 

Food Service

Finally, food service, after a brief hiatus, is back. Obviously, the pandemic took an enormous toll on the category, but we have seen such a pushback into the food service segment in 2022. It’s hard to believe we won’t see that franchise trend continue into the new year. This isn’t equal to all food service models, but the ones that built and defined their model for the current market trends are fairing extremely well. Chicken remains one of the hottest categories in the world, new franchise chicken brands are growing at an amazing rate, including Chicken Salad Chick, Al’s Hot Chicken, Nashville Chicken Coop and Shaq’s Big Chicken. Brands that offer off-premise dining are winning big, pizza for one hasn’t slowed down at all. New franchise brands such as Disco Pizza, Chicago Pizza with a Twist, Champion Pizza, and Sweet Lou’s Pizza have all grown through the franchise model effectively.  

Specialty dessert franchises that sell high-quality products in a quick, fast-serve environment continue to do well. Brands like IScream Gelato, Ice Cream Hut, Churn Ice Cream and others have all expanded successfully with franchising and will continue to expand further in the coming year. The coffee market has also expanded enormously, with brands such as Badass Coffee of Hawaii, Foxtail Coffee and Kahwa Coffee all growing quickly. The formula since the pandemic is simple, small footprint, delivery, drive-through, catering and other vehicles to bring the product to the customer in their home or car. Offer great products in a fast, convenient format, and the business model will work.

Franchising Trends in 2023 

Whatever the category, franchising is trending upwards in 2023. The new year is full of opportunity and promise for the franchise and small business community. If you have considered opening a small business or expanding your business through franchising, now could be the time to look further into the model and consider taking the first steps!

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Chris Conner has been a franchise consultant working with business owners and brands to support growth through franchising since 2001. His experience in the franchise development industry started with a Chicago-based franchise consulting firm where Chris had the opportunity to work with a variety of successful franchise systems including Jimmy John's, European Wax Center, 911 Restoration, Smash Burger, Marco’s Pizza, Mad Science Group and other franchise systems where he was able to learn the franchise development process and see firsthand the success that could be had in franchising when the right business model and right systems were put into place.

In 2009, Chris founded Franchise Marketing Systems (FMS), a company that provides strategic planning, development and sales for emerging franchise brands. FMS was developed in order to provide a full-service franchise development solution to new and existing franchisors. FMS provides strategic planning, FDD and Franchise Agreement development, Operations and Training Program development and Marketing Development to bring new brands to market as a franchise, then supports the franchise sales and marketing of the franchise. Chris oversees the FMS team and works directly with clients to execute the franchise development process, supporting planning, development work, franchise sales and franchise operations implementation work.

Since 2009, FMS has developed over 700 franchise brands globally and has a team of over 38 franchise consultants. FMS has developed successful franchise brands including Anytime Fitness, Baxter Healthcare, Blimpie, Hungry Howie’s Pizza, Restoration 1, Smash My Trash, Two Men and a Truck, Medifast Weight Loss, Matco Tools along with others. The FMS Team has been able to align with brands and franchise systems with a unified, consistent approach focused on growth, systems and transitioning from company-owned businesses to a scalable franchise system. Chris holds a Bachelor’s Degree in Marketing and Management Information Systems from Miami of Ohio University and an MBA in Finance from DePaul University in Chicago. He is married to Dr. Alaina Conner and has two children, Ashton and Jameson who make every day exciting, full of adventure and sometimes stress.
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