September 19, 2014

The Top Franchise Trends For 2008

Joel Libava on 2008 franchise trendsEditor’s Note: Joel Libava (pictured left), our resident franchise expert, gives us an insightful rundown of the big trends in the world of franchises. If you have ever thought of buying a franchise — or turning your business into a franchise for others to buy into — this is one article you will want to read again and again.

By Joel Libava

The year 2008 will be “Frantastic” for the franchise industry, which is an industry that typically does well when little things such as our economy, slow down.

The number of people inquiring about franchise ownership will increase dramatically in 2008, as the US economy continues to show signs of weakening. Case in point:

When the economy slumped after 9/11, millions of workers were downsized, and it became difficult for many of them to find decent replacement jobs. A sizable number of them (after a period of intense self-reflection, and some unpleasant spousal vibes) started looking into career alternatives. Investing in a franchise was one such alternative, and one that many people decided to do.

Fast forward a tad, and look at the current situation. The mortgage crisis, and increasing consumer debt, combined with the euphoric feeling that all of us will be experiencing when pumping $3.50 a gallon gasoline into our vehicles, are all contributing to a cautious economic growth forecast.

Although 2008 won’t be as severe in terms of job losses, the job market continues to tighten, which will again lead to more people looking into alternative career options.

According to a PricewaterhouseCoopers study from 2005, over $1.53 trillion in total economic comes from franchised businesses annually. ($Trillion!) Franchising is big business, and there is no shortage of opportunities to choose from.

Here, I have identified some general franchising trends to look for in 2008:

1. Semi-Absentee Ownership

For those of you that want to make a huge income, and only work 10 hours a week, this option is certainly enticing. Kidding. No such thing. (No such legitimate thing, anyway)

More and more people are opting to purchase franchises that will allow them to keep their jobs, while ramping their new businesses up. This proactive approach is increasingly popular, because these new small business owners can keep their present salaries coming in during that first critical year in business in which income could be negligible. A few of the franchise opportunities that offer the semi-absentee owner model are Great Clips, Fantastic Sam’s and Hollywood Tans.

2. Low Investment Opportunities

For those of you who can go out and market, there are some interesting options that could work for you. But before I name some specific concepts, let’s examine the phrase in italics, above. What does “go out and market” really mean? It means sell! Some of these low investment franchises are home based. You probably won’t be home much though. You will be out marketing, I mean … selling.

The direct mail industry is not shrinking as one would imagine (because of email marketing etc.). Consumers still open packets of coupons, and use them. Money Mailer is a well established franchise that has been successful in direct mail for years. Adventures In Advertising is a low investment franchise opportunity specializing in advertising and promotional products that you sell to the small and home based business market.

3. Women Focused Franchises

Over 7 million small businesses in the US are majority owned by women! Women and franchising can be a great combo ….

Some of the more interesting concepts that could appeal to future women small business owners include The Glove Lady, whose catchphrase is “How’s Your Glove Life?” Showhomes is a franchise concept that let’s you use your management and design abilities to showcase vacant homes for maximum appeal. Would you like to help future brides and their families make their wedding day memorable? Sweet Beginnings lets you, the franchise owner, generate income by planning the big day, from beginning to end!

Next, here are some specific franchise categories that will continue to trend upward in 2008 ….

1. Residential Cleaning Services

The dual income couple with kids, pets, limited time, and disposable income, will continue to seek out service providers that can provide time saving relief to their rather harried lives. It has been said that once one obtains the services of a competent residential cleaning concern, one finds it extremely hard to go without it! Some of the bigger franchise names in residential cleaning like Molly Maid, Merry Maids, The Maids, and Maid Brigade will continue to add new franchise owners, as demand continues to increase.

2. Child Related Services

Franchise concepts that help keep children in shape, both mentally, and physically, will continue to trend upward in 2008. Look for veteran children’s education providers like Sylvan and Huntington Learning Centers to add more franchise units around the country, while young upstart children’s educational franchises like Chyten and Children’s Lighthouse will offer some new approaches to educating kids. Day care is still a huge need in the US, and the Kiddie Academy, in business since 1981, provides day care and learning.

High energy, and bouncy birthday party franchise venues such as Pump It Up, will continue to provide entertainment to kids of all ages, while franchises like JW Tumbles will get the little ones tuned up and flexible, for their future endeavors in sports, and hopefully set them up for sports scholarships for college!

Cups made of cornstarch by Fabri-Kal3. Green Food Franchises

This is not a fad. Franchised restaurant chains are really becoming Eco-friendly operations. Nowadays, going “green” means so much more than purchasing free range chicken, and using only organic vegetables in the restaurant’s offerings. Boloco, a Boston based burrito franchise, is eliminating all the Styrofoam cups from its restaurants, and opting for cups made from … corn starch. Repeat. Corn starch.

Pizza Fusion is “Saving the Earth One Pizza At a Time.” One look at the company website, with its whirling windmills and a silhouette of an obvious Toyota hybrid automobile gives this company’s philosophy away. This pizza franchise features organic ingredients, and Hybrid pizza delivery vehicles. (Really!) More and more franchised restaurant chains will be ramping up their “green” initiatives, which will benefit all. Are you feeling green yet?

4. Technology Related Franchises

It is just not an option anymore to be in business and not have a company website. Whether you own a small manufacturing company, a local flower shop, or a home based business, you need a professional looking website. True Presence, a franchise out of Baltimore, provides products and services to help businesses establish themselves on the Web, from Web design to search marketing. They can also help develop email campaigns to help businesses stay in touch with their customer base.

After a small business has a presence on the Internet, franchises like Concerto Networks and TeamLogic IT, can help keep things humming along smoothly, offering tech help both on and off site.

Another area of technology that is starting to gain steam in the franchise industry is the video security area. Businesses are starting to realize just how important security and surveillance are. Employee theft can be curtailed with cameras mounted, and on the lookout for thievery. (Big Brother Is Watching) Even small small businesses will start mounting cameras at a location near you in 2008.

With its black and red “wrapped” Honda Elements cruising around town, EyesThere franchise owners will be hard to miss cruising around your town offering to design, build, and install video security systems for your business or home. Monitor Closely is another young franchise company hoping to capture some market share in this rapidly growing, and seemingly much needed, niche.

5. Staffing Franchises

As the demographic change continues in America (i.e., folks getting older), there will be a need for temporary workers to help replace some of the baby boomers who are retiring now. Also, some boomers still wish to work part time, and unfortunately some even have to.

Enter Express Personnel, a 550+ unit franchise operator out of Oklahoma. Their local franchisees can assist with everything from employee evaluations to temporary placement of workers. 10 til 2 provides part time staffing to companies that are open to … well … part timers. Their website promotes the idea that there is a need for job placement of college educated parents that want to have extreme flexibility, and that there are actually employers out there that support a work/home life balance, and want to hire quality people that only want to work part time. Nice.

6. Senior Care

No weakening in this segment of franchising. There will continue to be a huge need for all types of services that active seniors want and need. As millions of baby boomers retire in the next several years, now is the time to enter this market, so you can learn it well, and ramp it up for the growth that will be continuing.

Non medical care is needed, and Spectrum Home Services provides 5 different services that assist the elderly. (Hence the name: Spectrum!) Are you a senior who wants to help other seniors? Maybe Seniors Helping Seniors, a small franchise out of Pennsylvania is worth a look. You can provide non-medical assistance to your peers, who may be more open to you helping them run errands, and keep you company.

Franchises like BrightStar Healthcare provide everything nursing homes do, without having to actually go to a nursing home. Put another way, why would anyone want to go to a nursing home if they didn’t have to?

What if Grandma and Grandpa want to stretch their legs and maybe even pamper themselves a little? SarahCare is an adult day care center franchise that may have a mini day spa, concierge services, and a putting green.

If 2008 turns out to be the year for you to invest in a franchise of your own, try to align with ones that are within your investment budget, can use your skill sets, and that match your values.

Some things to avoid:

1. Fads. Just because “everyone” is talking about a specific franchise or segment, doesn’t mean it is sustainable in the long run.

2. Franchise concepts that are hard to understand. If you can’t figure out the business model, do you think others will? Sometimes simple is best.

3. Inexpensive franchise concepts. When was the last time cheap was better? Don’t buy an inexpensive franchise (under $40k total investment) unless you can find out from lots of current franchisees that the training and support are stellar. It takes lots of money for a business to franchise its concept, and lots of dedication to nurture and grow it.

4. Franchises that are growing real fast. As contrarian as this may sound, a franchise company that is growing at the speed of sound (the sound of dollars exchanging hands) may be great for publicity, and great for the franchisor, but it could leave new franchisees in the dust. As a franchisor grows, the infrastructure must grow along with it. It takes a lot of courage for a rapidly growing franchise concept to suspend new franchise sales for a few months, while it adds staff, office space, and technology to keep up with its growth.

As a matter of fact, that may be a franchise concept to watch, and eventually even join in 2008.

* * * * *

About the Author: Joel Libava is President and Life Changer of Franchise Selection Specialists. He blogs at The Franchise King Blog.

54 Comments ▼

Joel Libava - Franchise Expert


Joel Libava Joel Libava is the Franchise Expert for Small Business Trends. Joel, The Franchise King®, equips today’s prospective franchise owners with time-tested, proven techniques designed to increase odds of success. He does this through one-on-one coaching, and gobs of useful content that can be found on places like Small Business Trends, SBA.Gov, and his award-winning franchise blog, The Franchise King Blog . He’s been featured in Entrepreneur® magazine, and is frequently called upon by national media outlets and publications for his no-spin insights into the world of franchising.

54 Reactions

  1. I see you mentioned Pizza Fusion. They have no track record whatsoever, and are a complete fly by night organization. They have 2 stores open, hardly a franchise to recommend. With just a small bit of digging, you can see that it is fun by a guy who couldn’t handly the mortgage business, so he turned to pizza. With no experience, a gimickey idea, and a press release you can go a long way I guess.

  2. Hi Pizza Guy,
    This article is a trends article, written to make readers aware of the trends that are shaping the franchise world. Green food service operations are being watched by many, and Pizza Fusion is one to watch.

    Joel Libava
    {The writer…}

  3. Nice, Joel. Lots of great food for thought here. Thanks for taking the time to put this all together. I especially liked the “green food franchise” trend. Anything “green” is Hot, Hot, Hot!

    Anita

  4. Joel: We at The Little Gym International (www.thelittlegym.com) couldn’t agree more that there is a positive growth trend in our segment. The Little Gym International is the premier developer of motor skills in children aged 4 months to 12 years old, and we’ve enjoyed consistent, double-digit growth for more than a decade. In 2007 alone, we opened our 300th worldwide location, our first Manhattan franchise, and were named to the Inc. 5000 (acknowledging the nation’s fastest-growing private companies) and the International Council of Shopping Centers’ “Hot Retailers” (acknowledging the most innovative and promising retail concepts) lists as well as #1 in the Children’s Fitness category by Entrepreneur. We’re looking ahead to 2008 with great optimism, and are looking for those with a history of professional success, strong people skills and a deep love of children to join the The Little Gym family.
    Bob Bingham, President/CEO, The Little Gym International

  5. Some really interesting franchises to look at. Lots of good ideas.

  6. Hi Joel Libava
    I think you are really a good Franchise expert,
    One of the most I like is Technology related Franchise in your post, and at last you have mentioned that things to avoid its really makes a big difference form other experts. I thank ones again for sharing this valuable article.

  7. Joe,

    Nice article. You did not mention a franchise for Seniors called Homecare Assisted Living. Do you know anything about this franchise?

  8. Hi Nick,
    I never heard of that particular one. The senior related industry is growing, though…
    Why do you ask?
    Joel

  9. I wanted to know, after reading this and having some experience in many areas of marketing advertising promotion branding PR etc, if these companies that were mentioned specifically had any knowledge of you mentioning them or did they pay anything to be mentioned. I did not do any digging but since I am considering getting a franchise Id like to know if was a little bias.
    Thanks,
    Lance

  10. Hi Lance,
    Thanx for asking a great question. One thing about me….I don’t mince words, or play head games with folks that want real answers to their questions. Nobody payed me for a mention in this article. A couple of them knew I might mention them, but that is because I have worked with them in the past. I mention those I have worked with in articles because I know their systems, know their cultures, and know their philosophies. Other ones mentioned in this article I have followed, and feel that mentioning them is a huge value for the reader…you.

    The individual companies I chose in this article are important…but not as important as the trends that they represent. I never suggest choosing a franchise opportunity because it is in an article, or in a press release. I just featured Entrepreneur Magazine’s Top 10 Franchises for 2008 in my blog, The Franchise King Blog. Here is how I ended the story:
    “Out of the 500 franchises mentioned, there are probably some concepts worth looking into. Just don’t go out and buy a franchise because it is in a magazine. Or because it is being discussed on the internet. Or because your Uncle Ralph or Aunt Bessie thought that it was a rip-roaring idea. Invest in a franchise of your own because you did the due diligence correctly, and it feels right.”

    Lance, choose an opportunity because you did great research, and gathered the pertinent data. and do it because it “feels” right, after your data has been analyzed. Don’t invest in a franchise just because you read about it.
    Best of luck!
    Contact me at franpro@sbcglobal.net or call my office Toll Free at 1-800-460-8299 if you would like me to send you a terrific list of questions that must be asked of current franchisees of the systems that you decide to pursue..No charge.
    Joel Libava

  11. Very good consolidation. I hope your expectations would come true. I have also got alarmed with your precautions. Thanks for your help.

  12. I can see why you made the top 50 list, nice post!

  13. Woo-hoo, Joel! Nice job. You are #1 of all the franchising posts — WOW!!!! I am so proud of you, and so thankful you published it here on Small Business Trends. Thank you, thank you, thank you!

  14. Anita, Thank you for having faith in my work, and in me.
    Joel Libava

  15. Sorry for the late comment, but for Pizza Guy, I actually met with the Pizza Fusion founder at the last Franchise Show in D.C. and the one thing that struct me is how serious and determined this guy was. I have a feeling he will make it work. When I say serious, I mean he’s serious about the environement, he explained to me how they recuperate the heat from ovens and lots of other stuff I cant even remember of, but it did make me realize that they are not saying that they are green just to get some market shares. I would be happy to see that he does well for himself. It’s hard work and if he makes it, he should be proud!

  16. Thanks for a needed article, Joel. I like your good intuition, positive basis and approach (franchising does work for the small entrepreneur!), sprinkle a few ribbons to big and small, then shoot down some myths. You might have mentioned that two of the more familiar maid services, The Cleaning Authority and Maid Brigade, are making “green” waves, so they’ve got legs in two up-trending categories now. (To your credit: this was little known in 2007-in fact TCA is still “two weeks” away from a new green logo and website-don’t tell!)

    I’d like to see you write a column on just green franchises. I’ve had trouble getting a list together-there’s so much “noise” when searching the internet (hmmm…idea for a new type of search engine? Maybe a CraigsSearch? Cut out the bull? Like the early Google?) Seriously, green is not only in, works for all of us, as you mentioned. It would be nice to know who is, who’s going that way, and the unchanging.

    Mike Stoye

  17. Thanx for your comments,
    Mike. as for “green” franchises, there are more and more that are “Greening” their businesses, but not too many that are franchising green products/services.
    Joel Libava

  18. Both Senior Care and home healthcare services for all ages are growing industries. On January 10, 2008 the national radio show Franchise Interviews interviewed David Ritterling of the Visiting Angels franchise opportunity. The interview is available here: http://gofranchise.com/interviews_jan08.htm. Additionally, readers may be interested in HomeWatch Caregivers, an international franchise opportunity and the “premier provider of in-home care services for people of ALL ages.” You can get info by visiting this link: http://gofranchise.com/franchise_usa_listing.cfm/GoFranchise/International-Franchises/subcat_id/50.

  19. Hi Joel and Patricia.
    Franchise Interviews recently had another senior care franchise on our weekly radio show called Always Best Care. The US Census Bureau National Center for Health Statistics reported that by 2030 the senior population will be over 71 million! WOW!

    Best regards,

    Marty McDermott

  20. Dear Readers,
    Just so everybody knows what “comment spam” looks like, it is right up above, by a gal/robot named “Patricia.” As much as this being tries to disguise it as an almost intelligent comment in a long paragraph, you’ll notice that all the links go to a rather weak franchise “directory.” {Gofranchise} Please don’t “go” to it…}
    If this was a real comment, there actually would have been some substance, as opposed to a blatant commercial.
    Joel Libava

  21. Joel,
    What are your recommendations for a small college town that needs a franchise in it? No other competition around….in other words what works around a college campus?

  22. Stewy,
    If I suggested to you that you were asking me a “loaded” franchise question, would you take offense to my choice of words? The short answer to what type of franchise would work in a small college town is:

    Drum roll, please…..

    “It depends”

    It depends on what your role would be, your specific reasons for putting a franchise there, and if there is a high enough traffic count to support it etc. Many more questions are available at no charge.

    If you would like, contact me via email, and we can exchange phone #s. That way we could talk some things through. Maybe I could come up with some brilliant suggestions.
    Joel Libava
    franpro at sbcglobal dot net

  23. Weighing the options of a successful home business and a franchise, they both have solid points. A franchise has such high start up costs that just aren’t liquid if the franchise flops. Real estate, leased equipment, employee costs, and being bound to a local economy for start are all drags that come with most franchises. Home based web accessable business ideas are very inexpensive to start and can range from day care to just about anything. I operate a home business in the personal development industry, it’s a turnkey buisness. With systems in place and a track record. A person can find or start a home business doing anything really.

  24. Joe,
    As much as I appreciate the fact that you took a few minutes to read through my article on FRANCHISING, I hope you aren’t trying to compare your Network Marketing/MLM stuff with legitimate franchise opportunities. The are not even 3rd cousins.

    Joel Libava

  25. Excellent article. Very true on the cost and size of infrastructure to develop a franchise that can deliver for it’s franchise partners.

    John Yenney

  26. The problem with a franchise is they take out way to much of the owners profits. It takes time, energy and great service to start a business from the ground up. My Atlanta Maids company was launched two years ago and we have plenty of customers. We had to create our procedures and guidelines from scratch, but now that we know why we have them, everybody follows them to the letter. Franchising is like a cookie cutter, very little room for originality. There is plenty of knowledge out there to pick from. Why not pick the best out there from all kinds of different markets and bring those ideas back to your own?

  27. Hi, Joel –

    What are your thought on the franchise “Always Best Care”? I’ve been serching for reviews and can’t find any.

    Thanks
    Jo

  28. I think anyone interested in launching an industry specific franchise should consider the following:

    1. How much do you know about the franchise business.
    2. Would you enjoy working in that specific field.
    3. What is the total investment (time and capital) required to succeed in the business.
    4. The strength of the franchisor.

    Always do your due diligence and never allow the franchior to pressure you into making a decision before you are ready.

    If you would like to search franchise opportunities you may visit Franchise Farm at http://www.franfarm.com.

  29. Nearly two years after this article was published, the trend of “Green Food Franchises” still exists and seems to grow even stronger and the question “Are you feeling green yet?” becomes more and more important!

    Franchise-consultor Veronika Bellone tries to explain this by saying that so-called LOHAS (Lifestyle of Health and Sustainability), a growing section of the population who are thinking and acting in a health-conscious way, are the driving forces of this trend.

    If you want to read the whole article, go to
    http://tinyurl.com/yhhya73

  30. i think we already have enough franchise business in united state. from new york to los angeles, you can find the same store every where. people need more choices, new brands, and new looks.

  31. Thank you for this brilliant posting. My partner and i appreciated the thought you put into it. I truly believe I will browse a lot more you’ve writen around the theme. Thanks again!

  32. Hey Joel just stopping in to check out some more of your work. I wanted to address the semi abscent franchisee and tell you that as franchisors it’s very important to note that usually the most successful franchise owners are those that are really involved on a day-to-day basis. Let’s face it if you are a franchise owner no one will look after your business like you will. This is not to say that you can’t be successful in this way however, it could cause some other headaches and make sure your franchisor is up front about such issues.

  33. Hi David,

    Thanks for stopping by this Small Business blog.

    (One could spend weeks perusing and learning here.)

    I agree with you, for sure. However, there a few semi-absent models that work. And well.

    The Franchise King

  34. This is a great article about diverse types of franchise opportunities. I noticed that the Fantastic Sams link is broken – the website for Fantastic Sams Franchise Opportunities is http://www.fantasticsamsfranchises.com.

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