6 Trends That Prove Franchises Are a Hot Opportunity for Aspiring Entrepreneurs
A good entrepreneur knows when to jump on an opportunity to grow his or her business. Trends will come and go, but the key is to pay attention to them when they happen so you can make the most of the situation -- and maybe even turn a passing trend into long-term success for your business. Check out these six franchising trends and learn how you can take advantage:
1. Industry growth.
According to a study by the International Franchise Association (IFA), the franchise sector is predicted to grow by 1.7 percent in 2016. Additionally, total gross domestic product generated by the franchise sector is expected to reach $552 billion in 2016, up from $523 billion last year. What does this upward trend mean for you? Opportunity. With the sector growing at a steady rate, now is a great time to get started on your goal of owning your own business.
Related: The Basics of Buying a Franchise
2. Employment growth.
The IFA also predicted employment increases of 3.1 percent in franchise jobs -- totaling 9.1 million jobs, compared to the 8.8 million jobs added in 2015. The study has shown growth every year since 2010, which is a great sign for employment in the franchise sector. All this job growth means franchise businesses continue to prove they’re attractive to the quality employee candidates who can help you run your business effectively. This is great news because, after all, it’s likely you won’t be able to run your business by yourself.
3. Increased wages.
This year, minimum wages may increase due to new legislation, as well as societal pressures. However, it currently looks like the minimum wage may be applied equally across all sectors. If this is the case, then both costs and prices will increase equally across the board. Capitalize on this change by giving fair wages to your employees from the start. Your employees will be happier and more productive, and your customers will value your integrity as a business owner.
4. Increased diversity.
The fact is, minorities are quickly becoming the majority in the United States. The baby boomers are hitting retirement age, and minorities interested in entrepreneurship are stepping up and embracing the business opportunities available to them. Same goes for women. As the times change, minority influence will grow and more diversity in franchising will follow. So how does this help you? Businesses need a range of ideas and opinions in order to be successful. Make sure you’re hiring a wide variety of employees. With a wide variety of employees you will better reflect your customer base and increase flexibility.
5. Multi-unit ownership.
What’s more profitable than owning a successful business? Of course the answer is owning multiple successful businesses. Multi-unit ownership is on the rise this year, with aspiring entrepreneurs adding more than just one franchise location or business to their resumes. More locations, larger territory and more scale means more money and sustainability for you in the long run. How can you jump on board? Look into franchise opportunities that allow for ownership of more than one location. Or you can diversify your business ownership portfolio by partnering with multiple franchise brands that fit your skill set.
6. Food trucks.
Food trucks are very trendy right now. Because this is such a recent development, it’s hard to say if it will translate into a permanent part of the franchise food service sector. We will know more in a few years when the trend has been around longer. However, buying into a food truck franchise could be a promising opportunity right now as the industry is still young and growing at a rapid pace. The crystal ball is much less clear regarding the viability of this trend over the medium to long term.
Related: Franchise Basics
New trends in franchising come and go all the time, and by being aware of these trends, you can better capitalize on them for your business. For more information on how you can succeed as an entrepreneur in franchising, be sure to check out A Franchise Coach.
Entrepreneur Leadership Network Writer
Rick Bisio is the Amazon-bestselling author of The Educated Franchisee, a leading franchise coach with FranChoice, the co-host of Rick Bisio's Franchise Focus, and the creator of the FDD Exchange and the Franchise Glossary. Since becoming a franchise coach in 2002, Bisio has assisted thousands of aspiring entrepreneurs nationwide explore the dream of business ownership. Prior to joining FranChoice, he was the director of international development at AFC Enterprises, the parent company of Popeye's Chicken, Church's Chicken, Seattle's Best Coffee and Cinnabon, establishing locations in more than 30 countries.