Since the Federal Trade Commission took over regulation in 1979, the franchise industry has enjoyed steady growth. And, as we move further into the 21st century, all indications point to continued growth at a healthy pace. Franchising is growing not just in the U.S., but internationally also.

The pool from which new franchisees are drawn is growing simultaneously. In the upcoming years, potential franchise business owners will be generated in several ways.

Corporate downsizing remains the number one source of new entrepreneurs. As companies cut back to increase the bottom line, more out-placed candidates appear. Many of these candidates, disillusioned with the corporate world and a tidy severance package in hand, are ready to put their hard efforts to work for themselves.

Women and minorities will continue growing in the population of small business owners.

Investors looking for alternative means from the stock market will also become good franchise ownership candidates.

Of the five major franchise business categories—food, retail, automotive, personal service, and business service—several niches within each industry stand out with exceptional growth predictions in the coming years.

Among the nominees with outstanding future growth predictions are children’s educational services, senior care services and healthy fast food. According to a Newsweek poll, the worth of the children’s educational services industry has more than doubled in the last few years. Supplemental education, computer training, and basic tutoring services are now in demand in every community. And, senior care services will continue to grow as the senior population escalates. These services range from administering medications, light housekeeping or simple companionship.

Although there’s much more to franchising than french fries, the food sector remains the franchise industry’s largest and has the most recognizable companies. The trend is toward more healthy food such as fruit smoothies, wraps, soups, and salads. Healthy eating is not a fad— it’s here to stay and many franchises are offering lighter selections instead of the traditional heavy or fried fare. Food franchises are also leading the way to higher profit margins by mastering the concept of cobranding —combining complimentary franchises in a single location. For example, subs and frozen yogurt, or smoothies and pretzels. This offers a tremendous benefit for the franchisee, allowing multiple concepts under one roof with the expenses of a single business. The food industry is also leading the way in establishing non-traditional locations such as airports, gas stations and convenience stores.

In addition to the hot growth trends, are the old favorites—franchise concepts that have enjoyed strong, steady growth in the past and are still safe bets. Among these are sign companies, check cashing, dry cleaning, hair care, commercial/residential cleaning and janitorial companies; generally speaking, the service industry.

The service industry experienced growth in the past decade and indications for the future continue that pattern. Quite simply, we live in a society willing to pay for convenience. Whether it’s a personal service (dry
cleaning, hair salons) or a businessto- business service (sign companies, commercial janitorial), the concepts are strong and demand is high. Two other bonuses in the service industry are the typical lower investment requirements, based on small inventory needs, and inexpensive build-out for locations.

The automotive industry is another solid franchise industry that’s enjoyed steady growth predicted to continue. Automobiles are more expensive, we drive them longer (an average of nine years), and our commutes are farther than ever. A huge benefit to franchisees in the automotive industry is the view that they’re weather-proof and recession-proof: it doesn’t matter if Mother Nature is having a bad day or if the economy is weak, our cars are necessities and if they break down we must have them fixed.

Finally we come to retail. Like the others, it too has remained steady and should see more growth. Some of the newest trends in retail are franchise companies selling new and recycled (used) goods, such as sporting goods, tools, games etc. Medical concepts and children’s furniture and accessories are also hot areas in the retail sector. Other popular concepts include home décor and artwork.

No matter what the industry, or the niche, the decision to buy a franchise business should be based on more than the fact it’s a hot trend. Before a decision is made, ask yourself a few simple questions: Can I see myself doing this business? Will I enjoy it? Will this type of business allow me to reach my financial and career goals? Am I comfortable with the investment? The bottom line is to find the business that’s right for you!

Marshall Reddy is a franchise consultant with
Franchise Network in Jacksonville. Franchise Network
can be reached at (904) 280-1949 or via e-mail at Mreddy@frannet.com.