New ideas, products or services have always held a special appeal in the minds of Americans, particularly among consumers. As times change, so do our needs, personal preferences and spending habits. While certain concepts catch on quickly and then fade, others leave a lasting impression in the marketplace and change how we live and work.
In many respects, franchising is no different. It reflects the changing times and customer preferences, updated forms of communication and new technology used to run a business. Some franchises will flourish for many years with exceptional stability while others will fall by the wayside after some initial success. The world of franchising looks very different today than a half-century ago, and it will continue to evolve over the next 50 years.
When franchises first started, they were predominately storefronts, particularly restaurants and retail outlets. Over the last 10-15 years, we have seen an increased number of service-based franchises that can operate without a retail location. Some examples include maid, pool cleaning or handyman services. These businesses bring their products or services to the customer. Without the cost of building out a retail location, these concepts are particularly appealing to franchise prospects due to the lower initial investment, which is often less than $150,000.
As a franchise coach, I work with many people who are exploring franchise ownership opportunities, including many new popular brands that may not have been in existence just a decade ago. I have seen many new concepts come about within the last 25 years with qualities that position their brand for long-term success. These franchises often cater to what people need or want and successfully market their services.
A great example of a growing industry in franchising is in-home senior care. According to the most recent study on aging in the United States, 46 million Americans are currently age 65 or older, with that number expected to hit 98 million by 2060. The report also indicates Americans living with Alzheimer’s could nearly triple to 14 million cases by 2050. As more and more baby boomers become senior citizens, there will be a greater need than ever for in-home care services, and the trend is expected to continue for decades.
Along those same lines, there are many other growing franchise options in the health and wellness space. This includes urgent care facilities, direct access lab testing and retail healthcare outlets such as physical therapy and rehabilitation facilities. Alternative therapies such as massage, chiropractor and acupuncture have also proven to be successful franchise concepts.
Another field that has taken off in recent years is in the area of child enrichment. Parents are increasingly willing to pay for the entertainment, education and development of their children. Franchises have come up with many different and creative concepts from cooking to coding to science to athletics. They have been able to flourish by establishing camps, programs and classes to provide additional after-school and weekend options for kids. While it is hard to know which franchise system will succeed, parents will continue to spend money enriching the lives of their children well into the foreseeable future.
Many of these newer franchises reflect the changing philosophies and priorities Americans have in their everyday lives. While certain beauty salon franchises have been in existence for some time, there has recently been an interesting increase in the types and services offered in this category. Boutique salon concepts specializing in lash, waxing or ethnic hair care services have increased in popularity in recent years. The same goes for higher-end salon businesses that specifically market and cater to male customers.
The desire to have more outlets for grooming and pampering has extended to another beloved audience. Pets are now increasingly seen as part of the family and people are looking for pet-friendly establishments and places to groom, train and care for them. According to the American Pet Products Association (APPA), Americans spent a record $69.5 billion on their pets last year. Many franchises are taking advantage of the increased care and attention we are placing on our pets and becoming quite profitable from it.
While there are many different franchise concepts that have been successfully established over the last decades by following popular consumer trends, that doesn’t mean they are without risks. There are a number of businesses that start off with great interest and may have some initial success but fail to gain any long-term traction. We’ve previously seen eBay stores or various forms of home-meal replacement services generate a good deal of excitement in the outset only to lose their staying power.
In my opinion, one current example of this is cryotherapy, which uses cold temperatures as treatments to various ailments. Although this is a trendy form of therapy, I’m not convinced this is a franchise compatible industry. Cryotherapy feels more like a “menu addition.” Any existing business spa can purchase a cryotherapy chamber as a new service, similar to a tanning bed. In addition, the FDA has not cleared or approved cryotherapy to address any health ailments. My expectation is that there will be hundreds or maybe thousands of cryotherapy franchises sold, but I would be very surprised if cryotherapy becomes a sustainable sector.
This all comes back to something I always tell potential business owners about the importance of conducting due diligence. If you are interested in a new franchise concept that has recently taken off based on a market trend, you need to do a lot of research about its long-term viability. Why has it been profitable, and will it stay that way? Who are its customers, and will they move on to another new or exciting idea in just a few years?
The success of a business is dictated by consumer demand. There are a lot of great new franchise concepts out there, but you need to make sure there are many reasons it will remain successful over the long term before buying in.