5 Key Franchise Ownership Trends in 2015
It’s hard to believe, but the first quarter of 2015 is almost over. As a franchise coach, I annually spend the first part of March reviewing early-year developments, to provide aspiring entrepreneurs a complete and unbiased report on the current state of franchising.
So, on the heels of the annual International Franchise Association (IFA) Annual Convention, here are my “5 for 15” trends impacting the franchising world this year, illustrating why 2015 is an excellent time to start this type of business:
1. The increase in choices for financing
In 2015 there are more options than ever. The Express Small Business Administration (SBA) loan is available for those borrowing under $150,000. No collateral and only 10 percent to 15 percent down is required. There is also the Micro SBA product for loans under $50,000. Banks are once again promoting traditional debt financing such as the home equity line of credit (HELOC). And we are seeing more internal financing, a financing option available through franchisors to help you afford the cost of opening your own franchise location.
Not every franchise company offers internal financing, and programs have varying benefits, but internal financing is another option to consider. Further, all of these options are appearing in a low-interest environment with more relaxed approval standards. Together, these factors create more options, making business ownership possible for more people.
2. The rise of multigenerational partnerships.
Each year, millions of millennials are entering the workforce, so it’s imperative that companies and organizations create bridges between the generations. We’re trying to do our part to help by offering the Franchise Focus podcast. The podcast profiles some of the best and brightest young leaders in franchising, with a series of shows dedicated to the IFA’s NextGen initiative.
Here too there's a related trend that receives too little attention: the rise of multigenerational partnerships. Recently, I’ve noticed countless well-financed baby boomers eager to be their own bosses as well as many energetic millennials who want to ditch the corporate ladder for entrepreneurship. Pairing the two has led to many successful partnerships within franchising, because these millennials' passion, energy and technological savvy is the perfect complement to the baby boomers' experience and financial stability.
Related: The Basics of Buying a Franchise
3. The ubiquity of mobile
Mary Meeker, an analyst with Kleiner Perkins Caufield Byers, a leader in technology trend reviews, predicted that mobile would overtake fixed Internet access by 2014, and she was right. Around the globe today, there are more mobile users than desktop users, making mobile marketing a key for all businesses, including franchises. This year, 2015, is the one when hundreds of businesses will incorporate mobile into their marketing strategies and their businesses as a whole. Considering the number of mobile users, tools like mobile apps and text message marketing will help more and more businesses reach and influence customers.
4. The emphasis on community
In this age of social media, when all customers have a powerful voice, community building is more important than ever for business owners. Traditional rules are still in play, and customer service is key, but attention is required outside of the storefront. In today’s world, it's those business owners who take time to respond to online reviews, offer loyal fans timely deals via social media and promote online the ways in which they give back to the community who are winning -- and winning big.
5. The increase in growth
Each January, the International Franchise Association releases its Franchise Business Economic Outlook, which shares projections related to the business model’s growth. For the fifth consecutive year, the report has predicted that franchising’s growth will outpace that of the U.S. economy as a whole. This year, franchising will add 12,111 new franchise establishments and generate $889 billion in economic output, the 2015 report predicts. Furthermore, franchises will add 247,000 new jobs, representing a 2.9 percent increase in total jobs, a higher figure than that of the economy as a whole (2.4 percent)
In 2015, franchising is continuing to grow and prosper. Take the trends described into consideration, and make 2015 the year that you take control of your future by becoming your own boss.