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Young and Growing

Kid-centric new franchises such as Guard-a-Kid are ready to play with the big boys.

Older franchisors have weathered turbulent times before, but for newer companies, this recession has been their first real test--and what a test it's been. While some, inevitably, have had to throw in the towel, others have come through with shining colors. And if our ranking of the Top New Franchises of 2010 is any indication, many of these rising stars owe their success partly to the fact that their customers are almost as young as they are.

One-fifth of the franchises on our list are aimed at children and parents, offering everything from photography to tutoring and even glow-in-the-dark mini golf. FranChoice CEO Jeff Elgin isn't surprised by the dominance of children's franchises in the ranking. "They are pretty much recession resistant," he says, "since people are going to scrimp in a lot of areas before they start cutting stuff for their children."

Hossein Kasmai, president and CEO of Guard-A-Kid, No. 6 on the list, agrees. "I have two kids of my own, so children's safety, just like [for] any dad, is probably the most important thing for me." That was half of his motivation for starting the child ID company, which began franchising in 2005. The other half was that with his engineering background, he felt he could bring some high-tech solutions to what was a low-tech industry. In addition to the traditional ID cards, Guard-A-Kid franchisees offer CD-ROMs, GPS devices and other safety products to recover lost children as quickly as possible.

While other franchises both new and old struggled through 2009, Guard-A-Kid's number of franchises grew by almost 23 percent. Kasmai attributes that not only to the indispensability of the company's services, but also to the franchise's low startup costs--as little as $19,900. "The price point for the franchise makes it a very comprehensive type of business," he says, pointing out that franchisees range from former accountants to police officers who take on the business as a side job.

The company has also become more comprehensive in the last couple of years by adding safety products for other members of the family, from teenagers to grandparents and even pets. Although franchisees undoubtedly benefit from these extra revenue streams, especially right now when every little bit helps, the heart of Guard-A-Kid's business is still just what its name says. And that name is becoming an internationally recognized brand with the expansion of Guard-A-Kid's franchising program to more than a dozen countries.

So what lies ahead for the companies on our Top New Franchises list? Only time will tell, but after passing his first big test, Kasmai is confident about his company's future. "We forecast 2010 to be an even better year for us than 2009."

Tracy Stapp Herold is the special projects editor at Entrepreneur magazine. She works on franchise and business opportunity stories and listings, including the annual Franchise 500.

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This article was originally published in the March 2010 print edition of Entrepreneur with the headline: Young and Growing.

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