The franchise industry is enjoying a boom thanks largely to confident consumers and affordable loan rates. E-commerce is revolutionizing the sector as franchisors hunt for new ways to grow their market share. Even franchising giants like Dominos are exploring the digital wonderland that’s overtaking the business world. The digital B2B market is growing at a rapid pace, too, but not all of 2020’s franchise trends draw from technological advancement. Convenience is proving equally effective at drawing profits.
In the coming year, delivery businesses are expected to evolve into a growing franchising niche. All these trends have one thing in common: franchisors are tired of sitting behind counters waiting for customers to come to them. They’re going to their buyers instead. The business world is also adjusting to a renewed interest in health and ethical consumerism, so it no longer pays to trade without considering your long-term impact on the planet.
The Healthy Eater
The health and wellness food market has grown to 789 billion USD, and it’s projected to be worth 811 billion USD by 2021. Food has always been a core market in franchising, accounting for 36% of the U.S sector. Now that eco-ethics and healthy eating have intersected, that growth might spike even more than expected, so this is the moment to capitalize on the industry. Add an e-commerce element, and you’ll find it difficult to fail.
The fitness franchise sector is one of the fastest-growing niches, but in 2020, it will diversify to include micro-trends like prepackaged body transformation systems and app-based membership management. Why hire employees when your computer can cope with the red tape without your help? Many gyms are going employee-free, relying on automation to handle their admin. Wearable fitness tracking devices and high-intensity interval training are another two dominant future franchise trends, proving that technology is creeping into every element of the industry.
Not all future franchise trends relate to markets. The industry is also evolving on a business model level. 88% of multi-unit franchisees operate under one brand umbrella, and the trend is expected to dominate in the coming decade. This franchise structure encourages loyalty and skill-building, and it has an extra layer of benefits for franchisors. You get to recruit low-risk franchisees who have a proven track record, and there are few better ways to raise profits.
Multiple Concept Franchising
Multiple concept franchises capitalize on an old trick: diversification. Why count on one brand when you can count on many? Franchisees are increasingly trading under several brand umbrellas beneath a single corporate roof. That reduces operational expenses and allows franchisees to work with the same team even when they take on a new brand. In an economic downturn, they can exploit their most profitable markets and hedge against the losses of their unprofitable franchises. There’s something in it for franchisors, too. It helps you to source franchisees with significant skill and experience.
Generation Z will start entering the workforce in the coming decade. They’ll account for 20% of the workforce as early as 2020, and it’s only uphill from there. This generation is tech-driven and culturally aware, with 45% of new workers seeking a career that changes the world. That will upset the franchising cart as ethical brands win more franchisee hearts. Franchisors will need to adjust their business practices to keep up with future franchise trends and maintain their recruitment numbers.
There’s never been a better time to start changing the world, and franchising can help you to achieve it. The most successful franchise brands of 2020 will have a positive purpose, expressed through the ethics of their brand.