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We get asked "What's the new, hot thing in franchising?" all the time. Everyone wants to invest in the next big concept and what the hot franchises for 2020 are in our opinion. The problem is not every franchise is right for every person. It is more important to know about the trends in franchising. Then you can make a decision based on your personality AND what will be big. We have the perfect list of 2020 franchise trends for you to consider.
Franchise Trend #1: Service Versus Facility
The HIRE YOURSELF consultants have noticed a shift in interest towards service-based franchises (Not sure of the difference? We have a great article for you). These businesses have a built-in need the consumer wants fulfilled.
Service-based concepts often require less money to start-up but might require more sweat equity. Capital is often a concern for franchise candidates. You can easily leverage capital efficiently in these concepts.
Another great advantage is that a new franchisee can get to market quickly, allowing for a quicker return on investment. This is not true of facility-based concepts; it might take months to find a location and sign a lease alone.
One of the HIRE YOURSELF founders, Nat Truitt, experienced this when he purchased his first senior care franchise. He went to training and forty-five days later he opened his doors.
Franchise Trend #2: Multi-Unit Ownership
Did you know that more than half of all franchise units are owned by multi-unit operators? With over 745,000 units in operation, the math shows that owning three or more units can lead to tremendous success.
This franchise trend means more owners are working "on" their business than "in" their business. An owner with three or more stores will probably not be stocking shelves or flipping burgers. Instead, they will be developing new locations and using their business skills to manage their units for growth.
Franchisee candidates with deeper pockets and long runways can leverage new concepts to build an empire! During discovery, candidates will find that older franchises often have fewer territories available. This means you may not get an optimal location and growth within a particular franchise is limited.
Franchisees that opt to get in on the ground floor of a new franchise concept can purchase large territories, become multi-unit operators, and replace their corporate incomes through business ownership. Territory ownership is essentially growth insurance.
Franchise Trend #3: Recession-resistant Franchises
With so many experts discussing a looming recession, wanting to get into a franchise concept that is recession-resistant makes sense. Knowing what type of franchise is safe is harder to decide. We have noticed that when times are hard and people lose their jobs or have less income, they continue to spend money on things that make them feel good. We suggest you latch onto concepts that provide those services.
As Nat says, "A luxury once enjoyed becomes a necessity."
Boutique fitness is an expanding concept that makes someone feel good and has a social aspect to ingrain a culture of participation. Upscale men's haircut services will continue to grow and be popular.
Senior care has a double opportunity if there is an upcoming recession. The number of seniors requiring care will grow exponentially over the next ten years as the baby boomers age, and during a recession, selling a home is difficult. This means that in-home care will continue to increase in popularity and moving into retirement communities will be more difficult and expensive.
Correlated to this are franchises that offer other home services. Instead of building new homes, consumers tend to stay put and will remodel their current place of living. Painting services, lawn care, window replacement, and maid services can grow during recessions.
Marketing during a recession can help expand market share, and with your franchisors marketing department behind you, franchisees often experience growth during recessions. Mom-and-Pop stores will generally pull back on marketing spending during financial downturns, but franchisors will maintain or double-down on marketing.
Franchise Trend #4: Amazon-proof Businesses
We don't see Amazon cutting your hair, cleaning your house, or mowing your lawn anytime soon. Selecting a non-commodity focused franchise will help you keep Amazon away.
Franchises based around services or experiences will have an easier time growing while product-based stores are gobbled up by online retail. Successful service franchises tend to be relationship-based and hyper-local, further solidifying their resistance. Building a strong customer base locally with a solid customer service and satisfaction plan (which a franchisor will teach you) will keep Amazon at bay.
How many people have visited their local bookstore to only look the book up on Amazon and purchase it? Have you been able to do that with your massage?
Franchise Trend #5: Concepts
You are probably here for us to tell you the name of the franchises we think will be winners. At HIRE YOURSELF, we think a winner is based on you, not profit margin or average return alone.
BUT, there are some concepts that feed into the strong franchise trends we are seeing.
Group fitness and boutique gym concepts have been, and continue to be, expanding. Many of the popular franchises are even becoming household names! Their popularity means many of the territories have been purchased. Linking up with a new fitness concept can allow you to build a solid business. So don't forget about the pilates, yoga, and ballet franchises out there.
Axe throwing. As odd as that sounds, franchises specializing in this have increased in popularity recently. Corporate outings and birthdays are a great source of revenue in this model.
Hair removal, anti-aging treatments, and acne care are just a few things that can be handled at a MediSpa franchise concept. These franchises are popular with young and old consumers of both sexes. With such a wide range of consumers, marketing is simple and successful. These locations have something to appeal to everyone.
Beauty salons don't often appeal to men, but there is a new influx of upscale barbershops that cater directly to the male population. Men can get a stylish haircut in an atmosphere that is alluring to their psyche. Whether they provide special beard care, straight razor shaves, neck massages, or alcohol, each franchise finds a way to separate itself from a run-of-the-mill haircut experience.
Remember, the riches are in the niches.
Franchise Trend #6: Entrepreneurship
We live in a time when entrepreneurship is popular. Franchise ownership is a great opportunity for a corporate executive to enter the entrepreneurial world. At HIRE YOURSELF, we think of this shift as "entrepreneur lite."
As a corporate executive, you can leverage all of your business acumen into the success of your own business. The franchisor will provide a solid business model for you to use and from there you can flex your entrepreneur muscles through many aspects of building and growing your business.
What is the Right Franchise Trend for Me to Follow?
Navigating the world of franchise concepts and franchise trends can be hard. There are just so many options out there to choose from and investigate.
That is what the consultants at HIRE YOURSELF are here for. They will take you through a discovery process with coaching sessions to help you make the right decision.
All it takes is to sign-up for a free consultation today and tomorrow you can start down the path of controlling your own destiny and living life on your terms.
