Shopping for a Franchise? — Stay Away from the Next New Craze!
Cupcakes are all the rage these days in franchising, and while they make a pretty window, their long-term appeal may be fleeting. Frozen yogurt is also making a strong comeback after almost disappearing some years ago. But it doesn’t take much to saturate the market, and you know it’s a fad when it fizzles out fast.
What’s hot and what’s not may be a typical headline on a fashion spread, but you probably want to stay away from fads when it comes to franchises. Sort of like the flavor of the month, when folks get tired of it, they stop buying.
A better focus is to pinpoint what people need. After all, people are not likely to buy specialty cupcakes on a regular basis or continue buying frozen yogurt when the weather turns cold, which are just a couple of reasons why these businesses tend to come and go as often as the weather changes.
Some of the best opportunities are with franchises in well-established markets where the field may already be crowded. But there’s a lot to be said for the tried and true. After all, savvy buyers choose the economic sectors with consistent growth.
When starting a new business, your goal is to capitalize on long-term economic trends — as opposed to the flashy fad. Case in point: the International Franchise Association projects business and commercial and residential services will be the fastest growing sector of the franchise business in 2014.
The specific areas we like include health care, temporary staffing and other service businesses.
Solid Trends for Franchises
The health care industry has experienced good growth in recent years, and, as the baby boomers start to retire, the prospects for the future may even be better. You can find franchises that specialize in modifying homes for seniors, as well as supplying home health care aides.
As many companies cut jobs as a result of the Great Recession and a slow growing economy, they now rely more on temporary or contract workers. So the demand for temporary staffing services is on the rise with no clear end in sight.
A panoply of service businesses are thriving, particularly ones that tend to be recession resistant, not easily outsourced overseas or conducted over the internet. Examples include firms that conduct workplace drug and alcohol testing, mandated by the government for some industries, and companies specializing in the restoration of water damaged homes, since disasters, like floods or broken pipes, regularly occur without regard to our economic cycle.
While you don’t want to be seduced by the latest fad, you do want to anticipate future trends in the American economy. A strong business idea fulfills a deep-seated market need, which, as we know, some people may have not yet realized. Who would ever have guessed 20 years ago that Americans would now be so addicted to their espresso drinks!
Dan Citrenbaum is a franchise coach and consultant to entrepreneurs, who helps people achieve their dreams as small business owners. He has a proven track record helping people select and buy a franchise or existing business. Contact Dan at firstname.lastname@example.org or at (484) 278-4589 and view his company website at www.entrepreneuroption.com.
© Dan Citrenbaum 2019