How to choose the right industry before buying a franchise in 2018
Going independent with your business can be profitable, but there are risks. Two-thirds of independent small businesses fail within their first 2 years. Half of them survive 5 years. And only one-third of independent businesses remain successful for 10 years or longer. When you buy a franchise, you are choosing an umbrella of a larger company that is already well-known, profitable and successful.
McDonald’s was founded in 1954 and now they have more than 30,000 locations around the world. Wendy’s, launched in 1969, has expanded its network to over 6,500 establishments worldwide. These giants have now been running for around half a century. 80% of all McDonald’s outlets and 77% of all Wendy’s restaurants are operated by franchisees.
The franchise business model has proved so successful, because it gives you the ability to develop under a well-established and recognized brand. Group advertising and marketing resources available to franchisees are not usually available to independent small business owners. A lower risk of failure and the ability to improve your management skills within a strong network makes franchising one of the most lucrative ways to start a business.
Franchise business sectors which faced the biggest growth in 2017
Robert Cresanti, IFA President and CEO, claims: “Franchises will thrive and continue to strengthen the American economy by providing jobs in every community, playing an important role in the lives of Americans, and supporting a variety of job creating industries, from manufacturing to agriculture”.
In 2017, many business sectors faced significant growth due to franchising. Personal services, fast food restaurants, table/full service restaurants, retail products and services, and business services are five spheres that were positively affected in 2017.
Industries that are expected to grow in 2018
The growth of franchising sectors directly depends both on what people need (education, employment, treatment) and what people want (beauty, entertainment etc.). In 2016, the most profitable franchise sectors were cleaning, fast food, sports and beauty. The same tendency continued in 2017 and is expected to grow in 2018. Now, let’s take a look at five industries that are expected to bring the most growth and profit this year.
Fast food restaurants
In 2015, fast food chains generated a whoping $200 million in revenue. For the last 7 years, the amount of employees engaged in the fast food sector has been consistently growing. In 2018, this growth is expected to continue.
The number of restaurants in the United States is going to approach almost 250,000 in 2018. More than half of these are fast food franchises. With such rapid growth in this sector, franchising prospects are expected to be colossal in 2018. Here are some fast food franchises to consider this year:
Sports and recreation
Interest in the sports industry is increasing, and those who take part in organized training and fitness make up a large portion of customers in this industry. In 2016, the number of Americans who had memberships to various health clubs/gyms reached almost 60 million. This is a 3% increase when compared to 2015. About half of them were involved in sport-specific facilities that were designed for activities like kickboxing, spinning, and barre workouts.
Employment for personal trainers and fitness instructors is expected to grow rapidly in 2018-19, according to the website Job Outlook. Mark Daly, National Media Director for the franchise Anytime Fitness claims: “In the past 10 years, an increasing number of potential franchisees have been attracted to the fitness industry, specifically because, in addition to a recession-resilient industry, it also gives them a level of personal satisfaction”.
Here are some of the most lucrative fitness franchises you can choose to buy in 2018:
In 2015, the United States beauty industry generated about $56 million in revenue. The largest sector, with 86,000 locations, is hair care with 24% of the market share. Skin care is in second place (23.7% of market share) and is expected to bring in revenue of over $10 billion this year.More than 1 million of Americans are employed in the beauty sector, according to the Bureau of Labor Statistics. And the number is expected to grow. By 2024, the amount of manicurists and pedicurist, barbers, cosmetologists, and hairdressers is expected to grow by 10%. In six years there will be 12% more skincare specialists and 22% more massage therapists. In view of this, we’ve collected five beauty franchises for you to consider in 2018.
In 2017, Americans spent almost $70 billion on their pets. In 2018, this number is expected to approach $72 billion according to the American Pet Products Association. This shows endless franchising opportunities in this industry for 2018.
Pets food is expected to bring in as much as $29.88 billion in revenue: medicine and various supplies – $15.51 billion, vet care – $18.26 billion, live animal purchases – $2.01 billion. Based on this, buying a pet food store franchise may prove profitable in 2018.
Here are five options for you to consider this year:
Those wishing to invest in a frozen desserts franchise in 2018 face a real problem when narrowing it down to a product choice. The list includes flash-frozen ice cream, soft and hard ice cream, frozen custard, frozen yogurt, sorbet, gelato and many others. Very often, entrepreneurs choose to launch several product lines connected into a single network.
80% of Americans prefer frozen yogurt to gelato, ice cream or other treats. By 2020, the overall sales of frozen desserts are expected to reach $30 billion. This figure also refers to products sold in grocery stores. Here is a list of franchises you might want to consider choosing for 2018:
Apart from the options we’ve just mentioned, there are many more business alternatives to choose from in 2018. Health services, staffing and recruitment have always been on top. Having an initial investment of at least $10,000 is a good start. Check the franchise list to search for an opportunity in the industry that best fits your needs.
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