The State of Franchising

Twice every year we invite a large list of top and emerging franchise brands to undisclosed locations so that we can have them brief us on their business, franchisees, growth and plans for the future.  What I can tell you from a global view is that the state of franchising is robust, growing, creating countless jobs across the country and keeping the money generated in communities reinvested locally not sent to far off states or offshore.  The state of franchising in the U.S. is outstanding!

Now, let’s dive into some of the details.

Restaurants are still growing in niche categories.  The market had experienced a number of big growth trends in burgers, pizza and subs, so those categories are largely satisfied at the moment.  Those brands will fill gaps in larger markets, explore smaller markets and develop niche opportunities.  For the largest brands their major growth may still come from overseas markets.

In the food category we see growth opportunity for smaller market segments and operations that can maximize revenue while lowering overall investment.  The ability to move swiftly to take advantage of new trends of market needs will be a key factor for these smaller brands as they compete with large brands.

Services abound with a growing list of market categories to consider.

Retail site based consumer services: This category is dominated by the fitness, health, wellness and beauty avalanche.

In the fitness category the continued commoditization of big box gym memberships and movement away from large footprint offerings by people looking for better experiences, closer relationships and customization continues to contribute to one of the largest category shifts in franchise history, boutique fitness.

In the boutique fitness space consumers can pick one modality to pursue their goals or mix and match from amongst them.  In our informal surveys consumers in this space often use two or three brands to create a weekly regime that they enjoy.

For the franchise owner, these businesses often offer semi-absentee portfolio building game plans where they don’t have to work in the business on a daily basis as they grow their empire.

Also in this category, health and beauty brands offer additional portfolio building options with semi-absentee ownership.

Non-Retail based services:  Consumers and commercial customers can, more and more, find service providers that offer proven service offerings and consistent customer service.

In this category you will find home and office cleaners, commercial site services, construction, disaster recovery, repair services and much more.  This category surfaces new service offerings on a regular basis, some are semi-absentee while some have full time operators.

Senior care and services:  10,000 Baby Boomers reach retirement age every day, the Millennial generation is even bigger than the Baby Boomers!

With the economy being dominated by two earner families, the way we approach aging and care has changed dramatically.  Families need help for a variety of needs from medical and non-medical home care to mobility assistance and even picking the next home for your beloved family member.  Franchise owners step in and offer those mission critical services for families that are in need.  Proven systems, key contacts, reliable suppliers and technology often place the franchise providers in any community among the top providers for these services.

Franchise owners entering this space have a passion for helping people and a desire to take advantage of a long term growing need in their community.  Most of the categories in this space are relatively under served.  We see this as a robust growth category.

An important note on franchise development groups, we see a lot of them.  A number of the brands we met with were represented by various franchise development groups, that can be a good thing.  These development groups pool resources, streamline operations, speed time to open and assist owners with grand openings.  As you might imagine, some of these teams are better than others.  The groups we met with are the leaders in their space.

How do these groups potentially benefit you?  Empire building…

If you are focused on semi-absentee operations within a particular category, they will likely have your growth options when you need them.  These development groups tend to specialize either within a service category or a business model (or both).  So, if you buy a boutique fitness brand via one of these groups and they sell out that brand before you buy your next round, they will likely have already brought on one or more similar brands to develop next.

If you do see a franchise brand represented by a development team dig into what advanced services they offer to help their franchise brands and the franchisees of those brands achieve success.

As I said, the state of franchising is outstanding!  As you look for your first or next franchise you will have a lot of options, no need to settle for something that does not fit you or your goals.

What is your success story?  Let’s go find it!

George Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution. Contact the Franchising USA Expert George’s Hotline 703-424-2980.

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