Recent reports have revealed the franchise business sectors that are showing the fastest growth right now:
- Quick service restaurants, including both traditional fast food places like McDonald’s and also the newer “fast casual” sit down restaurants, are in the lead. Over 20% of Entrepreneur’s Franchise 500 are in this category. Fast food has been facing challenges this year. Continued concern over the health consequences of fast food, the focus of minimum wage protests on this category of business, and pushback by franchisees on franchisors’ attempts to change menus and concepts have all made 2014 a rough year. Will 2015 mark the end of the tough times — or will fast casual edge out fast food?
- Personal services, from salons and spas to gyms to senior care, are still on the rise. The Baby Boom consumers continue to fuel this segment of the franchise world, and they will probably continue to do so as the younger end of the generation holds off aging with cosmetic procedures, wellness, massage, and fitness… and the older part of the generation moves into the range of senior care services. As the economy continues to improve, younger consumers also seek out fitness and personal care services, favoring trendy boutique concepts.
- Home and building maintenance rivals personal care, with janitorial services and home cleaning services leading the pack. Green maintenance services continue to grow, too. This segment has plenty of room for growth. As businesses turn more to outsourcing services, maintenance services are likely to replace janitorial staff and building superintendents. New technologies also continue to emerge in the area of building maintenance and even in cleaning.
- Kids’ services such as tutoring and party services were the last of the fast-growing sectors of franchise businesses. Childcare is a hardy perennial, always showing high demand, but increasing concern over STEM (science, technology, engineering, and math) preparation has been driving interest in franchises like Mathnasium. The U.S. has been showing poorly in comparison with other nations in this area, raising worries about our kids’ level of preparation for the global economy. Perhaps even more of a concern, U.S. companies complain that they can’t find people with the STEM skills they need to hire. Parents are looking to make up the lack.
These business sectors are seeing the fastest growth right now, so they may be the most obvious choices. It makes sense to choose a franchise business opportunity that’s popular. On the other hand, fast growth can also mean strong competition. Be sure to check the competitive landscape in the area where you’re planning to open your franchise to be sure that the population will support another franchise in your chosen field.
And don’t forget to think about your own skills and interests. If your dream job is grooming dogs, you might not be happy with a cleaning service, even if that’s a hot franchise business segment. If you’re planning to take more of an executive approach and manage the business rather than taking the owner-operator route, though, it makes sense to go with high growth franchise opportunities.