October 25, 2014

The Top Franchise Trends for 2012

There’s certainly no shortage of dynamic concepts to explore in franchising in 2012. Finding opportunities to get into a business of your own is the easy part. Finding a willing financial partner to help you invest in a franchise business is still a bit more challenging.

franchise

For example, if you want to get involved in a franchise business that’s focused on renewable energy and maybe even sustainability, no problem; do a Google search of “green franchises.” Maybe you’re comfortable calling on customers and giving sales presentations; there are several opportunities (such as Sandler Training) available for you. Do you like food? (Silly question!) If you’ve always wanted to own your own restaurant, there are hundreds of unique food franchises, such as these gathered by Franchise Direct, to choose from.

Not all franchises require a commercial space; Pillar to Post and Mosquito Squad offer ways to be your own boss without having to negotiate a lease for the business. Another advantage of investing in a home-based franchise is that you can be up and running pretty fast. One more thing: Remember that your customers aren’t going to find you if you’re sitting at home. You’re going to have to do some serious networking. Your networking should always include being on the lookout for strategic referral partners, as John Jantsch suggests.

Some Things Haven’t Changed

In last year’s post on the top franchise trends, I wrote about the fact that small business lenders weren’t all that excited to lend money for franchise startups. As much as I don’t want to start going all negative here, it’s still true today; lenders aren’t lending enough, The New York Times reports, especially to small businesses.

I also wrote about the fact that homes had gone down in value: “Real estate is usually a major part of a franchise candidate’s net worth statement, and that’s now a problem. Home values are low, and in some cases, homes are underwater.”  According to Carole Cohen, a Cleveland Realtor who’s really dialed into the market, “Home prices in our area are down 26 to 28 percent.” (Her income took a hit because of the low prices.) Carole works for a family-owned real estate company, but there are real estate franchises, too, as this Red Carpet report points out.

What Has Changed?

The franchise industry’s focus has changed. By “industry,” I really mean only one part of the industry, but it’s a big one: The International Franchise Association, which is an association that promotes franchising.

I’m still trying to decide whether the combination of social media, and the business transparency that tends to be associated with it, has turned the IFA into a more powerful industry force, or not. On one hand, some of the higher-ups from the IFA, like Matt Haller, the Sr. Director of Communications, are starting to get a bit more active on Twitter, and have started to write some blog posts. However, the growth of social media has evened the playing field in the franchise industry; now voices outside of the IFA–independent ones–can be heard loud and clear, too. The industry is changing, and anyone with an Internet connection can watch some of the changes that are happening in real time.

For 2012, the IFA has decided to focus on two areas in 2012; one is nothing new, but the other one…

1. Military Veterans 

Veterans who are interested in possibly becoming franchise owners will undoubtedly run across the VetFran program. This program, founded in 1991, features 400-plus IFA member franchisors that offer training, mentoring and financial incentives to veterans interested in small business ownership and/or a career path in franchising. To date, approximately 2,000 veterans have become franchise business owners through this popular program.

I’ve personally assisted with our veterans, and have even been able to help a few of them become franchise owners. Today’s veterans have three things going for them when it comes to operating a franchise business. They are:

  • Finely-honed leadership skills
  • Personal discipline
  • Comfort with technology

I’m all for helping the men and women who’ve made major sacrifices to help us keep our freedom. Thousands of veterans are returning home from our wars, and need jobs and opportunities. For veterans who want to become business owners, franchising is certainly one path that they should look into.

Of course, they’re going to need small business loans in order to start these franchises, and that’s the part that worries me. That’s because a large number of veterans have had several tours of duty. It’s not like they’ve had a chance to build up their nest eggs. Hopefully, banks will come up with some creative loan programs to help veterans get into business for themselves.

2. Pro Athletes 

There’s really only one reason that the IFA is courting professional athletes, and it’s pretty obvious; the athletes don’t need small business loans. Can you think of any other reason?

According to the Bureau of Labor Statistics, there were about 16,500 professional athletes and sports competitors who held jobs as of 2008. This includes every sport, including all of the athletes who aren’t ready for prime time yet (that is, the minor leagues).

The thought of having 16,000 wealthy prospective franchise owners eventually searching for business opportunities in the world of franchising is a nice one. After all, what franchise development director wouldn’t want to have a slew of highly qualified candidates like Magic Johnson requesting information about a particular franchise concept?

While I don’t see hundreds of former professional athletes clamoring to become franchisees, if enough of them do, it could be terrific publicity for the franchise industry. I just don’t see it as a game-changer. (That sporting reference was unintentional!)

2012 will be a very important year in franchising. If the U.S. economy continues to struggle, growth will continue to be sparse in the franchise industry. But if things finally do start to turn around, there’s a lot of pent-up demand for the great products and services that franchises provide to both consumers and businesses.

If lenders start making more loans available for people who want to start businesses, there’s a large pool of prospective franchisees sitting in the wings, waiting to take their shot at The American Dream.

The franchise community is ready and waiting to help them do just that.


Franchise Photo via Shutterstock

21 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.

21 Reactions

  1. Sounds like financing is still a big deal in the franchise industry. I wish the banks would loosen up a bit (and that people would have been more responsible with their finances the last decade).

  2. Hi Robert,

    Me too. It’s getting really old.

    The Franchise King®

  3. Congratulations to Carole Cohen for the mention!

  4. Joel,

    I will have your trendspotting in mind when I am reading your new book… :)

  5. Joel: Great to hear! :) You have mentioned food franchises, have you covered the beverage industry? I am betting that tea drinking is an upcoming trend. We have written about Tazo (Starbucks) and Argo Tea on TeaParty.nu.

  6. I have a sign that tea is starting to get popular here in Gothenburg, Sweden. Several places serve Afternoon tea now.

    Do you know if I can find statistic on how much tea (Tazo) a place like Starbucks is selling, compared with the coffee? What do you think the ratio is? Every 10th cup is tea?

    Tea is the most popular beverage, after water, on a global scale.

  7. Wow, with a service like VetFran, I wish we were ready to franchise now!

    Our business derived its name from two of the founding fathers who fought hard to develop this country so what better way to build a franchise than with the help of those who are fighting to defend this country?

    As for pro-Athletes, since they usually have complicated tax returns(i.e. many state returns filed due to income being earned in each state they play in) I’d imagine they would be a great resource too!

    This blog is a God-send and will hopefully provide us with all the guidance we need to grow from small family-run business to family-run national powerhouse.

  8. Thanks for stopping by to read another one of my franchise articles, Clint.!

    Make sure to subscribe, as there are several new small business articles posted daily.

    Also, you’ll find several people commenting here almost daily, too (Could be good networking sources)

    The Franchise King®

  9. Anytime Joel! And if you could please check out our Tax News section and see if we’re on the right track ;)

    We’d love to start guest blogging as well, but first things first, we need to make sure that our blog has a strong following.

    • Clint,

      You seem to be on the right track.

      I do have one suggestion;

      If the picture on your website is not you–if they’re just stock pics, change them to a picture or two of you.

      The Franchise King®

  10. The About page has our president(and main preparer)’s photo. The stock images on the home page were to appeal to our prospective clients since we don’t have a collection of professional images of ourselves ;)

    Check out the About it also has a link to our “History” page which explains why we’re named “Jefferson Franklin Tax Services” instead of “Bill Masser CPA/EA Tax Service” or “Bill Masser CPA/EA and Family”.

  11. What about industries that are trending for 2012? We’ve seen a lot of healthier fast food chains, cleaning services, senior care franchises and vending franchises on the rise (mainly DVD rental kiosks). Do you have any insight?

  12. Push SBA to enhance, improve and make permanent the Patriot Express Pilot Loan program, and provide more push in the SBA Micro Loan program for vets, service members and their spouses. Also push Treasury to ensure vet lending, compliance and reporting in the Small Business Lending programs that they manage as part of the Jobs Act, same with Dept. of Ag. lending programs. Also, consider advocating for veteran small business lending in the CRA program. Also hook up with various States Linked Deposit programs to ensure veteran eligibility and utilization. Bill Elmore

    • Those are some great ideas, Bill.

      I think that the SBA has been very aggressive with their programs, and I hope they continue to be.

      Thanks for stopping by.

      The Franchise King®

  13. I have notice increase ads toward veterans to join a Franchise business. Just regular people who are trying to start a business not not being approve even with the SBA.Some are going to Hard Money Lenders.

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