The Hottest Franchise Categories of 2020

Here at Entrepreneur, we've been covering the franchise industry for more than 40 years-- and making predictions about it for just as long. Way back in March 1980, our very first Franchise 500 issue included a story titled "Franchising: Ready for the Eighties," which sought to offer "an incisive look at trends to watch in the Eighties... and predict the shape of franchising to come." Now we continue the tradition set by that article with our annual list looking at the franchise categories we expect to do best in the year ahead.

If you can find a copy of that 1980 article, you'll see some similarities between its predictions and ours. In 1980, we dubbed Mexican food "the brightest star in the fast-food heaven." Now that the category has expanded beyond fast food to fast-casual and full-service franchises, we think it has even more potential. The 1980 story touted "tremendous growth in limited-item snack shops," though it pointed to cookies and ice cream as examples, while we see potential in healthier snacks like acai bowls and juices today. And then there's this: "We expect recreation and leisure time activities to be a fertile area for franchising in the 1980s." We feel the same way about the 2020s... though the big recreation trend we went on to predict back then-- disco roller rinks-- is, sadly, nowhere to be found on our list today. We've also got childcare on our list this year, and back then we said, "Babysitting and childcare services is another [area] where the timing is right, considering the tremendous influx of working mothers and single-parent families in our society."

Of course, while some trends last for decades-- or come and go and come again-- not all of them last. In the 1980s, we also expounded on the "incredible potential of video stores." It's a good warning to take even the hottest trends with a grain of salt. And with that in mind, please remember that this list of franchises in trending categories is not intended as a recommendation of any particular franchise. Always do your homework before you invest by reading the company's legal documents, consulting with an attorney and an accountant, and talking to existing and former franchisees.

Beauty/Grooming

From haircare to hair removal, facials to pedicures, services that help people look and feel their best continue to be a winning formula in the franchise world. And while many of these services traditionally targeted women, franchises aimed at men and children are proving that their appeal is universal.

Breakfast

It’s long been called the most important meal of the day, but it wasn’t always the most popular. We’ve seen that change in recent years, and franchises are capitalizing on it. In addition to coffee and pastry shops, a number of new breakfast-focused restaurant concepts have popped up to offer heartier options.

Child Care

The demand for childcare continues to grow, and franchises are rising up to meet it. Established brands are experiencing strong, steady growth--impressive in an industry where startup costs can climb into the millions. And their success seems to be attracting a number of newer brands to the franchise model as well.

Entertainment/Recreation

Recreational activities have proven to be a fertile field for franchising, especially in recent years. Paint-and-sip and DIY studios are still particularly popular, along with family entertainment centers, but this year’s surprise new trend is ax throwing, with four new franchises joining the fray.

Fitness Businesses

Fitness is one of the fastest-growing categories, both in terms of number of concepts and number of units. Despite how competitive the industry is, it’s not unusual to see some franchisors open hundreds of units a year. Newer brands seek to compete by offering specialized workouts, like aerial fitness, rowing, and barre.

Health

Franchises offering health products and services have always formed a fairly small but growing corner of the franchise world. In recent years, though, the face of this category has changed from largely traditional health services to more alternative offerings, such as acupuncture, cryotherapy, IV therapy, and cannabis.

Juices/Acai Bowls

Consumers seeking healthier, fresher fast-food options have driven the strong growth of juice and smoothie franchises. Many have also added acai bowls to their menus, and the popularity of this item can be seen in the fact that a number of new franchisors make it the centerpiece of their concepts.

Mexican Food

In franchising, the Mexican food category is less saturated than burgers, pizza, or sandwiches, but the cuisine itself has only gained in popularity among American diners, making the industry ripe for growth. And the versatility of Mexican food means there’s a wide variety of concepts, from fast food to Tex-Mex to more traditional fare.

Pets

There’s no denying the attraction of a franchise that involves working with cute animals all day. And making life easier for pet owners can be financially rewarding as well. Spending on pets increases year after year, with an estimated $75 billion spent by Americans in 2019, according to the American Pet Products Association

Restoration Services

What’s hot in franchising isn’t always about what’s new or glamorous; often it has more to do with what has staying power. The restoration category, with its recession-proof reputation and steady growth, is a prime example. Disasters will always happen-- and there will always be a need for someone to clean up after them.