In Fashion or Franchising, Trendiness Is Fickle
When deciding what type of franchise to open, it can be tempting to look at what the current trends are.
But trendiness is a fickle thing. There's a reason the words most often paired with "trend" are "current" and "latest." Whether it's the fashion world or the franchise world, what's hot today might be old news by tomorrow.
Bottom line: If the industry you're looking at fits the dictionary's definition of "trendy" -- that is, "marked by ephemeral, superficial, or faddish appeal or taste" -- it's probably a good idea to look elsewhere. When researching a franchise, consider whether the product or service you're offering is something that appeals to current tastes but might fall out of fashion in the future.
The good news is, when it comes to franchising, not all trends are "ephemeral" or "faddish." Some have lasting potential, especially those that address a need as opposed to a want. Joel Libava of Franchise Selection Specialists Inc. points to 24-hour fitness as one example. "It's a great model for today's busy adults who know that they need to exercise, but can never seem to find the time," he says. "I don't see the 24-hour fitness concept going away anytime soon."
The other problem with franchises based on trends is that everyone follows the trend-- which means lots of competition. So even if you think a trend has lasting potential, you also need to consider how much competition there is, how much there might be in the future and what the market can sustain.
The number of senior-care franchises, for instance, continues to grow; 41 are currently listed on Entrepreneur.com, with new ones always being added, and 24 of those ranked in Entrepreneur's 2012 Franchise 500. But the senior population is growing right along with them. Not all senior-care franchises will last, but the growing need (again, need -- not want) means that many of them can and do manage to be successful in spite of the growing competition.
On the other hand, take frozen-yogurt franchises. They've enjoyed a second renaissance in recent years, but no matter how much people love frozen yogurt, there are still only so many frozen-yogurt stores that can possibly survive in a certain area. (See a related story on this topic here.) So while many new frozen-yogurt companies have entered franchising over the last few years, many have left it just as quickly. That said, several have risen above the throng and not only survived, but thrived.
As a potential franchisee, if you want to get into an industry that seems overcrowded -- or headed there -- seek out a franchise that is aware of the danger and has strategies to set itself apart from the competition. You want to find the company that will rise to the top, long after the hype has faded.