A quick internet search of “franchise trends” will turn up hundreds of results about the “next big thing” in the world of franchising. Is it a good idea for you to jump on those trends? In addition to the types of franchises on the rise, business models and funding sources are also subject to trends.
By their very nature, trends come and go. The franchising trends of 2019 are very different than the ones in 2000. Those were the times to invest in computer education and home decorating franchises. Now, rising franchise segments include fitness and eco-friendly franchises.
Becoming a franchisee is a long-term investment. It’s important to consider how long the industry will be popular. Is the trendy industry on the rise? Or is a specific franchise already in every market?
If a trendy industry is something you’re excited about and has a promising future, it might be a good idea to follow the trend. Avoid trendy industries if they don’t interest you or make sense for your business and lifestyle goals.
Multi-Brand Franchising Trend
There are a lot of ways to be a franchisee. It’s quite common for franchisees to pick one franchise to invest in and buy more franchise locations when they are ready to expand. It makes sense to grow in a franchise you already know and understand. Despite this, multi-brand franchising is on the rise. This is when a franchisee of one brand, becomes a franchisee of another brand.
Multi-brand franchising is a way for a franchisee to diversify or to simply increase their cash flow. There are several reasons to become a multi-brand franchisee. When a franchisee is ready to expand, their current franchise might already be at capacity in their specific area. Some franchisees are looking to leverage the product of service of their original brand. For example, a doggie daycare franchisee might be interested in becoming a pet supplies franchisee in the same area. Multi-brand franchising is also a great option for franchisees with a seasonal business. If a pool cleaning business gets a little slow in the winter, it might be a good idea to look into franchises that peak in the winter.
Multi-brand franchising is on the rise. It might be a good trend to follow if you are looking to expand your business and diversify your income streams. But if you are more interested in long-term growth with a single franchise, multi-brand franchising might be a franchising trend to avoid.
Figuring out financing for your franchise is important. Small business loans are a traditional funding source. However, bank loans can be difficult to secure. Especially for Millennials who generally have more student loan debt. Crowdfunding is on the rise, both inside and outside the franchising industry. It allows for anyone to make their case for funding to the public (or at least the internet). Websites like Kickstarter and GoFundMe make it easy to reach out for funds.
The crowdfunding trend will likely continue to be on the rise as tech savvy, indebted Millennials get into the world of franchising. Crowdfunding is a trend to follow if you are unlikely to secure a traditional loan. But crowdfunding is not a promise. If you want the security of a traditional bank backing, crowdfunding your franchise is a trend to avoid.
To Follow or Not Follow?
Trends come and go. And although consistency is a key component of business, certain franchising trends might work for you. It is important to carefully consider whether a specific trend will work for you and your franchising goals.