Top Franchise Trends For 2014

franchise trends for 2014

What’s the future hold for franchising in 2014? What sectors should you keep your eye on? If you’re looking into becoming the owner of a franchise, it’s important to be a trend-watcher. It’s important to find out what today’s franchisors are up to.

In this, my sixth annual top franchise trends article, I’m going to let you in on the top franchise trends for 2014 that are taking shape in the franchise industry. All of them are worth watching and some of them might be right up your alley. So let’s see what franchising has in store for 2014.

Franchise Trends for 2014 Headed Your Way

More and more franchise opportunities are starting to appear that are highly specialized. These opportunities feature products and services that are hyper-focused on specific niches. Some examples include:

The Interface Financial Group (IFG)

IFG franchisees are in the business of helping companies improve their cash-flow by using a form of short-term borrowing called invoice discounting.

Invoice discounting allows a business to draw down a percentage of their outstanding sales invoices, so they can have immediate cash flow. Revenue for franchisees comes from the fees they charge businesses that wish to implement this highly specialized solution to improving cash flow.

Mosquito Squad

Pest extermination as a business has been around a long time. Our view on bugs hasn’t changed during this time; they must be eliminated. Mosquito Squad is different because they only focus on outdoor pests like mosquitos and ticks.

Franchisees have two market opportunities: homes and businesses.  Let’s focus on the business opportunities:

  • Playgrounds
  • Beaches
  • Golf courses
  • Stadiums
  • Outdoor restaurants
  • Theme parks

Venues like the ones I just listed take pest-control seriously and they’ll pay for specialized services like the ones Mosquito Squad franchisees provide.

Brain Balance Achievement Centers

Brain Balance Achievement Centers offer programs that focus on the underlying issues resulting in most of the behavioral, developmental, and learning disorders that plague so many children today.

The co-founder and creator of the special programs offered by these centers is Dr. Robert Melillo. He’s a researcher and the author of several bestselling books including “Disconnected Kids and Reconnected Kids.” His latest book is titled “Autism.”

Franchisees try to help children with:

  • ADHD
  • Learning disorders
  • Behavioral issues
  • Processing disorders
  • Asperger’s
  • PDD-NOS

No healthcare experience is necessary to become an owner. This franchisor is looking for people that have the desire to make a difference in the lives of children and their families.

Other niche franchise opportunities that may be worth a look in 2014 include:

  • Rapid Recovery, a refrigerant recovery franchise business.
  • WG Storage and Delivery, a franchise that provides high-end moving and storage solutions.
  • UFC Gym,  a fitness franchise offering boxing, kick-boxing and basic mixed martial arts training and workouts.
  • OsteoStrong a franchise offering a natural wellness based system designed to improve the symptoms of Osteoporosis, Osteopenia, and Fibromyalgia.
  • Kona Ice a franchise that sends tropical-themed frozen dessert trucks to children’s events, corporate events and fundraisers.

Franchise Trends In Food

A comprehensive article on the top franchise trends wouldn’t be complete without mentioning some of things taking place in franchising’s most visible sector, food franchises. One of the things I’ve been watching is the trend towards self-serve. Franchisors in the frozen dessert segment are the ones that have really been focusing on self-serve, especially frozen yogurt franchises.

The Fuzzy Peach is a young franchisor out of the Wilmington, North Carolina area, offers a rotating array of toppings that customers add to their favorite frozen yogurt selections. The end product is then weighed and charged accordingly.

Menchie’s is another self-serve frozen yogurt franchise that lets customers create their own frozen desserts using fresh toppings and fresh yogurt that comes from “Happy California cows that live in nice weather year-round.”

Several other franchises in the frozen yogurt sector offer self-serve including, FroyoWorld, CherryBerry Self Service Yogurt Bar, YoGo Factory, Yogurtland, and Zinga!

The newest segment in self-serve food franchising combines vending machines with healthy snacks. Vending machines have always been self-serve. It’s just that they’ve never really offered a lot of healthy choices for consumers to purchase…until now.

Headquartered in sunny San Diego, Fresh Healthy Vending has 200+ franchisees servicing over 2,300 vending machines. One of the niches they’re concentrating on is military bases, where there are always hungry men and women that need to stay in tip-top shape.

Human Healthy Vending claims to be “a socially responsible franchisor of healthy vending machine and micromarket franchise businesses.” Their offerings include vending machines specializing in coffee, and a large selection of machines offering fresh fruit and even locally sourced products. There’s also an option to add a 23-inch LCD video monitor to the vending machines to stream ads for additional revenue opportunities.

There are also a few business opportunities - which differ from franchise opportunities – being offered in the vending machine space including Grow Vending, Healthier4You Vending, and Naturals2Go.

Tech Trends In Franchising

It’s all about mobile for 2014. The importance of mobile technology in franchising can’t be overstated. Today’s franchisees need to have access to their businesses when they’re not on-site. They need to have the power to make decisions while they’re on the go…decisions that can affect the profitability of their franchises.

Franchisors need to make sure that their corporate websites are optimized for mobile viewing, so their future clients, customers and prospective franchisees will stay engaged long enough to get information and take action.

Ramon Ray, a community member of Small Business Trends, and a small business technology expert, told me this about the importance of mobile technology:

“If you are not as productive out of the office as you are in the office – you are NOT productive. Successful business owners must leave…..their offices. Do NOT reduce productivity just because you’re not on the office. Mobile technology and good processes will make you a digital ninja.”

Today’s busy consumers are using their mobile devices for everything from online shopping to surfing locally for places to eat. They’re also using the Click to Call feature that more and more mobile business websites are featuring. Franchisors need to make sure that their franchisees can capitalize on every opportunity that’s increasingly coming from people using mobile devices.

Franchisors that are investing in mobile technology today…the kind that their franchisees can use to become more productive and more profitable, are making a wise long-term business choice. Here are some other examples of how some franchisors are using mobile technology:

McDonald’s is testing out a smartphone app that scans a unique QR code when customers visit a location and activates a virtual “scratch card” that reveals prizes like free food or discounts. Franchisees of Zoom Room, a dog-training franchise, can use an iPad to do things like check dogs in for their training classes, bill and take pictures of their “clients.”

Some fast food chains are investing in Point of Sale (POS) systems that can accept payments from their customers’ mobile devices. This trend will gain momentum in 2014. Little Caesar’s Pizza encourages website visitors to download branded ringtones to their smartphones in the hopes that Little Caesar’s will remain top of mind when it’s pizza time.

Great Clips, a hair care franchise with over 3,400 locations, offers online check in for clients that would prefer not to wait for a stylist once they arrive at their local salon.

Mobile technology use will continue to grow in 2014, and franchisors need to continue finding ways to utilize it for maximum benefit.

Loud Franchisees

They’re starting to get louder. They’re starting to have more impact… more clout.

“They” are the franchisees. They’re the ones who have put their own money on the line in order to be in business for themselves. And some of them are starting to have real impact. Some of them are starting to change things in franchising. For example, several franchisees of McDonald’s decided that they’re not going to take it anymore.

This past summer a group of them banded together and formally complained to corporate about the increasing fees that McDonald’s charges them and their shrinking profits. There was also what I’ll call, “franchisee feedback” concerning the Dollar Menu, and the lack of profit because of it. Well, someone at corporate listened, because the Dollar Menu is no more.

McDonald’s franchise owners are a powerful bunch. They’re some of most elite in franchising. They have an amazing and very powerful brand (and system) behind them. And, even though their profit margins aren’t what they used to be, they really do have a pretty good thing going. They want (for the most part) to stay in business.

As opposed to the next group – because they’re out of business.

Loud Ex-Franchisees

Disgruntled ex-franchisees (or soon to be ex-franchisees) are some of most vocal around. For the most part, these franchisees aren’t looking for change. They’re looking to recoup their losses. A few of them even focus on preventing others from losing their money.

You can thank the invention of the Internet and the still-growing popularity of social media for the ease with which dissatisfied franchisees can voice their feelings. A couple of websites immediately come to mind when it comes to learning which franchisors are getting heat from their franchisees.

Rip-Off Report

I’ve personally used information from this consumer protection website to assist my clients with their franchise research. A gentleman by the name of Ed Magedson started the Ripoff Report website more than 10 years ago. His stated goal:

“To empower consumers by helping them to speak out, share information and fight back against bad business practices.”

Ripoff Report is a no-holds-barred website that prides itself on honoring free speech.

Type “franchise” in the search box and you’ll find information on all sorts of things related to franchising.  Everything from supposed faulty heat pumps that were sold and installed by heating and air conditioning franchisees and/or their employees to fitness franchises that possibly went out of business and aren’t refunding membership dues are listed.

You’ll also find complaints from franchisees that have supposedly lost their money on specific franchise opportunities. And, once in a while, there will be a complaint about a franchise broker or franchise consultant who supposedly sold an unsuspecting franchise business buyer a franchise that turned out to be not as described.

If you’re going to use a website like Ripoff Report as part of your research on a franchise, you have to be willing to do a deeper dig into what you’ve found. See if you can find out more about the people or companies mentioned in the complaint by typing the name into a search engine and seeing what comes up. Also make sure you mention what you found to your franchise sales rep and to the franchisees that you’re contacting as part of your due diligence. That way you can hear both sides of the story.

UnhappyFranchisee.com

I’ve known Sean Kelly, the proprietor of UnhappyFranchisee.com, for several years. He’s hilarious and can write with the best of them. He’s been in franchising longer than me and has heard his share of stories about franchise concepts that didn’t quite make the grade.

That’s probably one of the reasons he launched his website a few years ago. His other reason? Like me, he wants to make sure that today’s would-be franchise owners have all the information – the bad and the good – about the opportunities they’re thinking of investing in.

Fact: Most people who are looking at franchise ownership are doing so for the first time, so there are bound to be mistakes made. But, sometimes the mistakes seem to be made by the franchisor. The Unhappy Franchisee website has several examples. And, as an added bonus, the comment area of the site features ex-franchisees of some of the franchise concepts that have been reported on sharing their true-life stories.

Franchising, like any industry, includes great companies, average companies and lousy companies. The trick is to find the ones that excel in their niches.

Make sure that your research includes conversations with current franchisees. They’re the ones who have already taken the risk. They’re the ones who are working in their businesses every day. They’re the ones with the answers.

There are plenty of good franchise opportunities for you to check out in 2014. I only scratched the surface with these franchise trends for 2014. It’s up to you to find one that you feel offers the best chance of success.

Franchise Photo via Shutterstock

14 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.

14 Reactions

  1. Martin Lindeskog

    Joel: Frozen Yogurt has come to Gothenburg, Sweden. I haven’t tasted it yet, but I will when the weather is more suitable for eating cold stuff! ;)

    Do you have any insights on Starbucks new store specialized on tea?

  2. Brain balance? I guess this is a clear sign that people need more than simple counseling in their everyday lives. While I know that life has definitely become more complicated, I was surprised to see this at the top franchise list.

  3. Hi Joel,

    I’m seriously thinking of buying a hair salon franchise but with so many out there (20 or more excluding non-franchise ones) and tons of franchisees already in the business, what do you think of such a franchise? Overcrowded? Saturated? As good as (or even better than) when Supercuts or Greatclips started some 30 years ago? I’d appreciate your expert input, thanks!

    • Terry,

      Great question-I’m very familiar with the hair salon segment of franchising.

      There are lots of chains for sure. But, all of them aren’t created equal; just ask their customers.

      Some areas can support a lot of salons…it just depends. The best salon franchisors avoid over-saturating a market.

      Are you looking into franchises like these because you can be semi-absentee?

      Please feel free to contact me- Joel at thefranchiseking dot com for more answers and tips.

      The Franchise King®

  4. P.S. Hi Joel, one more question, if money or personality is not an issue, which type of franchise do you think offer a better Return On Investment – hair salon or house cleaning? Thanks.

    • Terry,

      ROI, huh?

      If you can be patient…which means if you can wait for a couple of years, both can be good.

      Are you prepared to invest a lot of money? If so, multi-unit ownership could be the way to go-hair salons.

      If you’re prepared to spend a lot less money, residential house cleaning could work.

      Different models. Different roles for the franchisees.

      The Franchise King®

  5. Thank you for your reply and valuable tips, Joel!

    Are you looking into franchises like these because you can be semi-absentee? Yes, I am.

    Generally, how many months or years of living expenses should I set aside for a hair salon franchise like Great Clips? (Assuming it doesn’t go under.)

    Is a before tax annual net profit of $50k realistic to expect from a single location hair salon – based on semi-absentee ownership?

    My wife seems to find those big name residential cleaning franchises’ franchise fee of $50k to $60k excessive, on top of that, there are also a ton of other fees the charge! What is your take on this?

    • Hi Terry,

      When it comes to income projections etc. it’s best to discuss them in a more private setting, in my experience.

      Information…like what your requesting, can be easily available to you via the current franchisees.

      You just have to ask them for it, nicely.

      As for residential cleaning franchises, a lot of the money is marketing money; you need a lot of it.

      The Franchise King®

  6. There is a lot of conversation and questions here about investing in a hair salon franchise. Joel, you’ve done a great job of answering these questions.

    Know that salon franchises, like Fantastic Sams, offer great resources on their sites, and are always willing to discuss the investment opportunity with you. They want to get the right investors for the opportunity, so they’re not going to lead you to invest in the franchise if it is not a good fit for you.

  7. Hello Joel,
    I have been wanting to start my own business for a long time but never really new what kind. However here recently I have been giving some serous thought to going into the home inspection business. The trouble is, I have not been able to decide rather to go it alone or franchise with someone like WIN. As a Veteran I can receive some pretty good incentives when it comes to the franchising cost but I can also receive good small business loan rates. Do you have any advise? Thanks

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