The Top 5 Hot Franchise Categories for 2023, According to One Industry Expert
Despite the economic uncertainty as the year comes to an end, there is reason to be bullish about franchising in 2023. If you're looking to become your own boss, here are five franchising opportunities to consider that are poised to thrive in 2023 and beyond.
Opinions expressed by Entrepreneur contributors are their own.
As 2022 comes to a close, the world sits in an uncertain place with inflation and recession woes dominating the economy. While many people pull back during these times, there are always opportunities when the masses panic. For entrepreneurs looking to make their mark in 2023, franchising provides the safety and security of a proven business model, while allowing for someone to be their own boss. As CEO of Fransmart, a company focused on emerging brands in innovative industries, these are the five hottest franchise categories I'm excited about for 2023.
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Today there is a focus on both looking good and having a healthy lifestyle. Both trends play into the explosion of self-care franchises. People want to look good and feel good and are looking for ways to accomplish that that don't necessarily include dieting or working out. This means medspas, blow-out bars and massage and waxing studios are thriving as people look for small ways to feel better.
The personal care and beauty market was valued at $85.06 billion in 2022 with annual growth expected of nearly four percent. The medspa category is also bolstered by the fact that many physicians are looking for a plan B after the stress of the pandemic and the ongoing battle of dealing with insurance companies. Medspas provide a lucrative, easier career path than traditional medicine for doctors looking for a career change.
The franchises to look for to capitalize on the self-care market are those that put focus on proprietary technology, easy operations and strong unit economics.
Electronics and Gaming
Personal electronic devices are so ingrained in our daily life that it's easy to argue that they've gone from being a luxury to a need. The rise of work-from-home, IoT, online learning and streaming entertainment will continue to fuel demand for personal electronics.
In 2021 the revenue of the global consumer electronics market was $1 trillion and growing. For franchisees, opportunities in the category include wireless retail franchises, electronic repair franchises, buy, sell and trade electronics and IT support services.
People today treat their pets like a member of their family, and their spending on Fido and Fluffy reflects this. In 2021, the average person spent $1,332 on their pet per year. Factor in that 67% of U.S. households have at least one pet, and it's no surprise that the pet industry is nearly a $110 billion category. Over the past decade, the amount Americans spend on their pets has doubled. This means pet-focused franchises can be lucrative business opportunities for franchisees in 2023.
The biggest subcategory for franchises is pet food and pet treats. More than half of millennial pet owners buy their pets at least one gift a month, and pet apparel is among the fastest-growing categories. Pet services are also hot franchise opportunities with dog walking growing to $979.2 million and pet grooming expected to reach $5.49 billion by 2025.
With approximately 76 million Baby Boomers in the country ranging in age from 58 to 76, and with 98 million seniors expected by 2060, representing 24% of the population, it's easy to see why the market for senior care is only going to grow exponentially.
The unprecedented number of older Americans will require more medical care and assistance than the current system can support. In fact, the home healthcare industry is expected to grow from $100 billion in 2016 to $225 billion in 2025.
Right now, many of the franchise opportunities lie in in-home care. While this will continue, I expect we'll see more franchises that leverage technology to meet the growing need for elder care. This could be in the form of telehealth, wearable technology, the use of IoT to make a home "smart" and easier for seniors to run by voice commands and the implementation of AI to predict patterns based on seniors' behaviors.
With rising interest rates and rampant inflation, the home-buying frenzy of the past few years is coming to an end. This will provide an opportunity for franchises focused on home improvement. With people staying put, many will decide to invest in upgrades to their existing houses.
The home improvement segment has been growing for a decade and is projected to exceed $600 billion by 2025, which represents a doubling in size since 2008. Within the category are many types of franchise businesses ranging from window treatments, closet remodeling, painting and handyman services.
I believe we'll see growth in services that help Baby Boomers age in place, improve home offices, install technology to make the home a smart home and make the home more sustainable.
Despite the uncertainties in the market, franchising is a business model that performs well during recessionary times. Franchisees are not at the whim of an employer and the systems and support provided by a franchise makes it easier to be successful with a franchise business than striking out on your own during challenging economic times.