Hot Trends in Franchising
The world of franchising is dynamic and diverse. For many would-be business owners, franchising offers a more assured path to business ownership and financial independence. In this economic climate certain types of franchises are very promising. Here are four key questions to ask:
(1) What do people buy whether times are good or not? In economic downturns, people will spend money on things they consider a necessity rather than a luxury. Businesses that provide necessities do well during a recession. . One example: hair styling. Regardless of the economy, hair grows and has to be groomed and cut.
(2) Which products or services have fast growing demand? Certain demographic or sociological trends boost demand, often signaling long-term growth potential, and businesses that go with these trends will do very well even in tough times. An excellent example is the senior care industry. The senior population will double in the next twenty years as the Baby Boomers age and then keep expanding for years after that.
(3) What businesses have lower start up and operating costs? Many service-types franchises can be started for a fraction of a traditional Brick & Mortar franchise like McDonalds and be run with very little overhead. Some can even be operated from a home office but yield profits and income that equal or even surpass the potential of much more expensive retail options.
(4) Which businesses will have high re-sale value? A business that investors will be interested in buying 10, 15 or 20 years from now can potentially offer a higher future return than real estate or the stock market, while also meeting current income needs. By seeing a business as both a source of income and a form of equity, franchise owners can even exercise more direct control over their long-term financial planning.
Using these four factors as a guide here are seven franchises categories well worth looking into because they meet all four of the criteria above:
Senior care: This industry has been strong for some time and will remain so for years to come. Two major factors drive this business: demographics and the desire of many seniors to stay in their homes. The first baby boomers turn 65 in 2011 and taking care of America’s aging population is a booming business. America’s seniors will need more and more helping hands over the next thirty years.
Personal care: A little bit of TLC goes a long way, especially among salons/barbershops, which have enjoyed steady growth over the past few years.
Fitness: Health and wellness have been a top concern since the 1980s aerobics craze and there are a number of low-cost retail options that offer customized programs ranging from weight loss and nutrition to body building or specialized physical therapy
Pets: Though pet owners may buy fewer toys and treats during a recession, they will still make sure that their pets are healthy and happy. Franchises offering pet services like training, day care and grooming are doing well. And with 75 million dogs and 88 million cats in the U.S., the pet market continues to grow, reaching $44 billion in 2009
Child-related services: Despite the recession consumers still spend money on their children, particularly supplemental education that focuses on core learning skills, test preparation or art, music and sports.
Green Tech: Traditional franchises such as lawn care and food are turning organic and eco-friendly. Others focus on recycling of products or energy efficiency. This is an emerging market that will become more diverse and profitable over the next decade.
Third-party Billing: Property clean up and restoration after a fire, a storm or flooding and auto repairs after an accident are two examples of services handles by professionals that are often paid through insurance claims. These essential services are largely immune to recessionary pressures and property preservation services to cover foreclosed or otherwise empty properties has been a growth industry for several years.
Jack Kuykendall is a consultant at www.FranchiseGuidepost.com His contact info is:
JackKuykendall@msn.com or Office 909 980 0698
