Franchise Buying Guide

In the Know

Looking for a franchise forecast? Your search ends here, as we predict what will break on franchising's horizon in 2006.
Presented by Guidant Financial
Guidant Financial specializes in helping entrepreneurs purchase new franchises using their retirement funds.

Every year, we at Entrepreneur sit down to examine the wide world of franchising. We always expect to find overall growth in certain categories, but the amount of growth we discovered across the board this year was phenomenal. Undeniably, 2005 is the year that franchising itself became a trend. In fact, the total number of franchise units for all Franchise 500® companies grew 11 percent from 2004 to 2005. That's an impressive jump compared to the 4 percent increase that occurred from 2003 to 2004, not to mention the previous year's drop in franchise units.

So what's spurring this amazing growth? More people are recognizing franchising as a viable means to turn entrepreneurial dreams into reality. And franchising's influence is being felt far and wide. It's attracting jaded corporate employees ready to apply their business savvy and skills to their own businesses, as well as a generation of baby boomers who aren't quite ready to retire. Meanwhile, entrepreneurs are increasingly embracing franchising as a way to expand their existing businesses. All this translated to $134.2 billion in sales during the past fiscal year for the 2006 Franchise 500® companies.

That said, we dug a little deeper and uncovered eight growing categories we predict will sweep the franchising world in 2006. Ranging from eBay consignment stores to kids' specialty services, these are hot opportunities you won't want to miss.

Do-It-Yourself Meal Preparation
We knew it was coming. We saw the signs of a budding industry. It is, hands down, among the top franchising trends for this year. Do-it-yourself meal preparation businesses are reinventing the process of cooking by transforming it into a painless social activity. Franchises like Dinner By Design do all the hard work, including the grocery shopping, prep work and even the cleanup. The customers simply assemble the meals and, two hours later, go home with a month's worth of meals that they just have to freeze and heat later. "Our stated goal is to bring the family back to the dinner table," says Robin Perry, national director of franchise sales for Dinner By Design. "Forty percent of the meals consumed in America today are eaten outside the home."

Indeed, Americans now have little time for cooking. According to a 2005 nationwide ConAgra Foods survey, more than 70 percent of parents experience some type of stress associated with dinnertime. That stress, combined with a growing desire to be with family following tragic events like 9/11 and Hurricane Katrina, make this business concept increasingly desirable and relevant in today's society.

Consequently, this category has long-term potential. "Whenever you start out in a new industry, the first question is, Is this going to be a flavor-of-the-month type of thing?" says Perry. "But this business is going to be here for a long time."

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This article was originally published in the January 2006 print edition of Entrepreneur with the headline: In the Know.

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