As a franchise consultant, I speak with franchisors every day about what they offer, their growth rate, and how they are rebounding from the 2020 dumpster fire. The truth is, some aren’t doing great and it makes me nervous for the aspiring business owners looking at their business models.
One thing is for sure. The winners and losers are becoming clear now. Here are the franchise segments that are doing well now and are expected to have a bright future beyond 2021.
Specialty fitness
Overnight, the big box gyms shut down. The CDC nor club members were comfortable trading sweat on machines and passing weights back and forth. Unlike other businesses, there was no way to adapt, so they just closed.
The pent-up demand for fitness shifted to in-home options. It was such a dramatic shift it caused disruptions in the supply chain. Since that time, an interesting phenomenon has emerged. The large gyms haven’t fully recovered. Industry executives aren’t sure when or IF they ever will.
However a new segment, specialty fitness has proven to be resilient and is doing quite well now. Rather than the low-cost-low service option larger gyms offer, smaller facilities have positioned themselves as a premium service with nearly one on one consultation. As it turns out, consumers love it and are willing to pay much more than $9.99 per month. Some of the businesses charge 20 times that monthly rate and they are booked for months. That makes for a profitable business quickly.
Yoga
Rowing
Boxing
Cardio Dance
Cycling
Pilates and more
Wellness/Beauty
As people get their lives back to normal, we’re seeing interest and activity build for beauty services. What’s interesting about this is the business model. Innovative franchises are selling memberships. It’s a win-win because the customer gets slightly better rates and the business enjoys a predictable revenue stream. Rather than try and provide many services like a full-service salon, they are doing just a few and performing them well.
Massage
Eyebrow and eyelash enhancement
Specialty stretching
Pet services
People love their pets. While that’s nothing new, how grooming services are delivered has been changing. The industry was ripe for disruption and we are seeing a couple of major players challenge large supermarket-style pet stores for market share.
High net worth pet owners are opting for spa-like accommodations for Fido that they can’t get anywhere else. Infused with technology, these concepts have focused on wellness and ease of use for pet owners. It’s working in a big way.
Service businesses
There has been a renewed interest in service businesses, particularly those that service homeowners. It looks like this “work-from-home” trend will be with us a while and when your home is also your office, people are willing to make investments in those deferred projects. It could be redoing closets, painting, additions, or even just cleaning out the garage. Technology businesses have been the glamorous choice for some aspiring entrepreneurs, but getting back to basics by providing a good service at a fair price never goes out of style. Service businesses like these are technology resistant and will never become obsolete.
Thousand of franchise businesses will come from these segments. The International Franchise Association projects 26,000 new franchise businesses this year. Indeed, it’s an exciting time to own a new franchise…IF you choose the right one. Let us help you narrow your search