As the world’s largest franchise consulting organization, FranServe, Inc. consultants have a finger on the pulse of the franchising industry. But how an individual defines the “best” industry or business differs greatly, depending on where your interests lie. For instance, do you want to know what the fastest-growing category is? The brand that’s garnering the most buzz? Where you’ll get the fastest ROI?
The key metric you should be using is what’s important to you. That said, there are myriad articles, surveys and lists that evaluate all the franchises out there based on various criteria. As you consider your professional and lifestyle goals for 2020 and beyond, the following data can be used as a tool in your decision-making arsenal.
MOST NEW BRANDS
One of the indicators of a thriving franchise sector is how many new businesses are emerging. With so many entering the landscape each year, we are seeing a lot of exciting innovation from these newer concepts in an attempt to contend with market saturation.
Independent franchise market research and consulting firm FRANdata—one of the leading reputable generators of industry-wide data—studied this very trend. As illustrated in the chart below, the leading category in terms of new brands is Fitness, followed by Health, and Food, respectively.
Credit: FRANdata
At FranServe, we see the same trends. What’s interesting to note is that the brands in each sector are somewhat related in their focus. For example, new franchise brands in the Food category support healthy lifestyles and brands in the Fitness sector have a more niche focus than ever before.
MOST SATISFIED FRANCHISEES
There are a few driving factors that fuel most peoples’ decision to start or own a business; one of them is career satisfaction. Franchise market research firm Franchise Business Review surveyed more than 27,500 franchisees from hundreds of today’s leading brands to get a snapshot of who is most satisfied.
The criteria for this analysis focused on the areas of leadership, training, and core values, among questions pertaining to respondents’ business lifestyle and overall enjoyment of franchise ownership. With this data, they created the Top 200 Best Franchises of 2020 list. From that list of 200, we honed in on two key areas: the categories that ranked highest and those cited most often.
Top Ranked
Of the top 20 concepts listed, the following categories rose to the top:
– Business Services (4)
– Retail (3)
– Services (3)
Most Frequently Cited
Of the entire Top 200 list, the following categories occupied the most spots:
-Food (32)
-Home Services (23)
-Services (21)
-Business Services (17)
*Honorable mention: At 14 each, there was a three-way tie between Senior Care, Child Services, and Cleaning & Maintenance.
This is a clear indication of where the interest in business ownership lies as it relates to the franchise space. Franchise opportunities continue to evolve, and as more brands offer affordable, profitable business models, more opportunities in broader categories exist.
BEST INVESTMENT
Each year, Forbes magazine commissions FRANdata to compile a list of “best” and “worst” franchises to buy. While we strongly emphasize the quotation marks, the factors weighed in assembling this list are comprehensive, including system sustainability, system demands, value for investment, franchisor support, and franchisor stability.
Aside from job satisfaction, it’s safe to say that making money is another primary objective for most business owners. As companies are now offering greater levels of transparency into how much an average franchise location can earn, Forbes’ list offers an assessment of which businesses offer the best value, broken out by investment levels. Here are the franchise categories that ranked best at each level:
Best “High Investment” Franchise Categories
Of the top 10 “high investment” concepts, Food topped the list, followed by Educational Child Care.
Best “Medium Investment” Franchise Categories
Of the Top 10 “medium investment” concepts, again, Food took the lead. Following behind was Services (home, child and business).
Best “Low Investment” Franchise Categories
Of the top 10 “low investment” opportunities, Senior Care took the top rankings; however, Service concepts comprised a majority of the total list.
As illustrated here, investment costs come in all ranges. A “high investment” often means a brick and mortar location, full staff, equipment, etc. A “low investment” can be a home-based, owner/operator model with no staff. The investment size doesn’t make a brand “better” or “worse”; it comes down to what business model fits with one’s goals.
What’s important to keep top of mind is that the path to franchise ownership is incredibly unique and personal to every individual. Having an awareness of what’s going on in the industry is valuable, but what’s trending for others may not be what’s right for you. That’s exactly what our consultants are here for—to connect you with the business that checks off all your boxes.
There’s a saying in this industry: “you’re in business for yourself but not by yourself.” FranServe is often the first to show prospective franchisees how true that is. If you are considering franchise ownership, you can start by taking a look at our database of franchises or fill out this simple form to request information to help guide you.