Emerging Brands Fuel Consistent Growth in the Franchising Industry The benefits of investigating brand new concepts
By Jeff Cheatham •
Opinions expressed by Entrepreneur contributors are their own.
When most people think franchising they think McDonald's. While it's true that large-scale mega brands like McDonald's and Subway are globally recognizable, the reality is that there are thousands of other franchise opportunities on the market today. Some are old and well-established, but for many others, franchising is a new experience – a way for brands to rapidly expand their reach, influence and revenue-generating potential. Though the parameters for defining what constitutes an "emerging" franchise, common denominators include brands that have been franchising for one-to-five years, a smattering of corporate locations but few franchisees or those who have yet to expand beyond 10 to 50 awarded units.
Related: What Makes These 9 Emerging and Thriving Franchises Unique?
Entering brave new worlds
About 300 new franchise concepts are launched every year. The introduction of these newbies, along with other brands that fall under the category of emerging franchises, actually make up the majority of all opportunities. Many experts agree that approximately 80% of all franchises have less than 100 units. That makes for an extremely competitive landscape, as each of these emerging brands vie for the attention of potential franchisees. To succeed in the world of franchising requires continual improvements to the brand's business model, growth strategy, systems and processes. Still, nothing is more important than sales. Without robust sales, there is no replication or expansion, and a slim chance of ever shedding the "emerging" label.
Related: Channel Your Inner Pioneer and Sign Up With an Emerging Franchise
The ground floor beckons
Though they might be far from being legacy brands, there are numerous advantages to investing in newborn franchises. There's a phrase for those who invest in early-stage businesses – "getting in on the ground floor" – and with franchising, this mentality can be extremely lucrative. It may be a risk, but if an emerging brand becomes the next big thing, you stand to gain when you're one of the original investors. As with any franchise opportunity, the multi-unit path can double or triple your chance for success, but it's even more impactful when a new brand gains traction and notoriety.
Related: 4 Helpful Tips for Emerging Franchise Brands
Planting your own flag
Emerging brands often have a wider selection of territories, areas and varied degrees of franchise ownership – including multi-unit deals, area development deals and master franchisee licenses. It's a means to acquire more of an enterprise operation than would likely be possible with an established franchise.
Franchisor's pet
Emerging brands can provide a more direct line of support and communication with the corporate office, allowing owners to become the proverbial big fish in a little pond. Management will likely be much more receptive to input and ideas when they're just starting out. The same goes for training and ongoing support, which isn't divided among hundreds of needy franchisees in a crowded system as it often is with larger franchises.
Emerging brands have consistently and will continue to fuel growth in the franchise industry. If you're thinking about entering the franchise business, it's wise to consider some newborn franchises.
Entrepreneur recently released their 2022 Top New & Emerging Franchises Ranking, which features 150 thriving brands that have been franchising for less than five years. Each emerging franchise was evaluated by assessing start-up costs and fees, unit growth, overall strength, training and ongoing support and the financial health of the concept's parent company organization.
