Good as Gold

Tech

A tech rebound is brewing in our Franchise 500®. Back in the 1980s, tech franchises were powering up, thanks to the popularity of computer retailers and software stores. Then, like the industry overall, tech franchises took a nose dive. But in the past couple of years, we've seen a major resurgence in the category, particularly in computer training and consulting. Unit growth among Franchise 500® tech franchises was almost 54 percent between 2002 and 2003 in the United States and Canada and about 30 percent worldwide.

Why? "We're seeing an increased and continual dependence by people and businesses on their technology," says Chip Reaves, national director of Computer Troubleshooters, an on-site computer services provider whose units nearly doubled last year. "People need advice on what to buy and what not to buy, and solutions for overcoming problems."

Computer Moms International Corp., a training and support provider, has seen a shift in its client base since it started 10 years ago. "The greatest demand for our services has swung to the business market," says Linda Burzynski, president and CEO of Computer Moms, which added 30 franchises last year. "More businesses are looking to outsource their IT support solution requirements. The demand for quality full-service training and tech support is vast now and expected to become even greater."

Home Improvement
Whether influenced by lower interest rates, a desire to curl up in a cozier home or the gaggle of home improvement shows, consumers keep spending on their dwellings. According to a 2002 survey by American Demographics and MapInfo, younger baby boomers, with an estimated spending power of $1.1 trillion, are investing in their homes. Nearly 69 percent of this group are homeowners who spend 17 percent more than the average consumer on their dwellings.

This home-sweet-home mentality resulted in almost 15 percent growth in the home improvement category of this year's Franchise 500�, with the most growth recorded in the building services, handyman, remodeling, windows, painting and lighting sectors.

Kitchen Tune-Up, a kitchen remodeling franchise, credits TV shows like Trading Spaces and While You Were Out, and lower interest rates, with ramping up interest. Fitness
Sure, fitness franchises have been around forever. But the growth in this category wasn't all that exciting until recently. This year, fitness franchises grew almost 30 percent. The catalyst for the revitalization in fitness can be summed up in one word:
Contours Express, another women-only fitness franchise, more than doubled its unit count, growing from 51 to 111 units in the past year. Jazzercise Inc., a dance fitness program founded in 1977, gained nearly 400 franchises last year.

New systems have also emerged to meet specialized fitness needs. With five franchised units in this year's listing, Velocity Sports Performance works one-on-one with athletes of all levels to improve their strength, power, speed, agility, flexibility and energy. Fitness Together, with 73 franchises, offers personalized, one-on-one fitness training.

Traditional fitness centers also grew. Gold's Gym, founded in the '60s, grew by 14 franchised units. "Fitness and obesity have taken center stage in the media, and people are starting to understand the necessity of exercise," says Courtney Minor, franchise development manager for Gold's Gym Franchising Inc. "All the research and news coverage is pointing to diet and exercise as the only real answer, and that leaves gyms at the center of any short- or long-term solution."

Now and Then
What a difference 25 years makes. Take a look at how the top five franchise categories (based on the number of operating franchise units) have changed over time.
1980
1. Food
2. Services
3. Automotive
4. Retail
5. Business Services
2004
1. Food
2. Maintenance
3. Retail
4. Services
5. Chrildren's Businesses
SOURCE: Entrepreneur's Franchise 500� (1980, 2004)

 

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This article was originally published in the January 2004 print edition of Entrepreneur with the headline: Good as Gold.

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