Three Growing Areas to Start Successful Franchises
With all the hype thrown around, it’s hard to tell what’s legitimate and what’s greasy. When you research different franchises, there’s a lot of pageantry involved with Discovery Days and the boasting of irrelevant figures. Buying a franchise should look more like a partnership, even with the big guys. It is illegal to disclose how much any individual franchise location will make, and past profits will be included in the FDD. This puts future franchise owners in a precarious spot. This is why transparency and research are the road lines in the street of due diligence. So what are the successful franchises and what are the sinking ships?
Looking at the industry as a whole helps future owners get a comprehensive peak at their possible ROI. The three industries that dominate the franchise market are also the fastest growing: Quick-Service Restaurants, Pet Services, and Maintenance.
Let’s examine each to see the pros and cons of investment.
Quick-Service Restaurants
Since 1955, when the golden arches first opened their doors to franchising and burger gourmands alike, the fast food titans have reigned the market. This has forced newcomers to innovate. The new models are designed with a more upscale ambiance. A popular model is the quick customizable menu choices that were first popularized by Chipotle. One step further, are the all-natural healthier alternative chains who are gaining huge traction, like Panera Bread.
Although in the past two years, McDonald’s did close around 750 locations. In the same time period—the chain opened 1,000 additions to their international location count. These openings offset the failing locations. The net 300 additions are keeping the franchise afloat. If anything, this is indicative of a shifting market and how franchisee ambition can make or break the success of a restaurant.
One thing is for sure, whether you plan on opening a Subway or a Taco Bell you’re well within an industry that will not budge.
The Pet Franchise Industry
Many have found a way to translate their love for animals into owning successful franchises in the currently exploding pet industry. Pet ownership is on the rise with 84.6 million homes in the U.S. reporting to own pets. In response to the demand for pet food, care, medical services, and dog leashes franchising in all-things-pets has become a lucrative and joyful experience for franchise owners.
The industry has been steadily rising since the early 90’s. Spending really took off during the recession and 2015 when spending increased by almost 11%, or $6.47 billion.
This new demand opened the floodgates for workers ditching corporate America and finding better opportunities owning anything from a pet grooming franchise to a dog training center. Mobile grooming is also taking off. Many pet owners prefer the convenience of getting their dog’s grooming done from their house. The dual pet grooming shops that also sell retail items have seen enormous growth too. These franchises model the mom-and-pop pet store but have profitable business concepts like recurring revenue to continually push the business forward. The advantages of these concepts are proliferating into successful franchises.
As pets become more of a staple of American life, and the norm becomes thinking of them as children who should be spoiled as such, it is evident this industry will continue to swell.
Maintenance Franchises
Low start-up costs, the inevitability of everything getting dirty, and eventually breaking is the recipe for dozens of successful franchises in the maintenance industry.
Maid services, lawn care, electrical, and appliance repair are just a few niches within the second largest segment in the franchise domain. Maintenance franchises make up 12.6% of the market. This growth welcomes handymen everywhere to put their practical skills to money-making uses with proven business models.
The best franchises to research are ones with environmentally friendly messages and solutions. As more awareness of carbon footprints and sustainability increases, many customers will opt for eco-friendly products and services. Consumers are typically willing to pay higher costs for cleaner solutions.
Franchises like NaturaLawn of America, Mosquito Squad, and You’ve got Maids are all great places to start the search. However, be wary of franchises that have come into some controversial heat in the last few years. A few companies have been sued for fraud and other unethical business practices and publicity of this nature is not the brand you want to represent. All litigation will be disclosed in an FDD.
The Secret to Successful Franchises Everyone Knows About
Yes—research, instincts, and finding the perfect match are all crucial when shopping around for small businesses. But the real reason franchise owners earn their ROI a year after opening—then go on to expand and earn considerable wealth—is they were able to take a critical look at themselves.
Owning a small business takes dedication. You are in a constant flux of creativity. When market trends shift out of your favor, how do develop a marketing campaign to bring customers back? When construction begins on the street in front of your shop, how do you endure the shortage of foot traffic?
The answer is passion.
Find out what you are passionate about. Then you will not only be able to reach successful heights, but the everyday challenges of owning a business will play an integral factor in your happiness.
Good luck!
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