I am constantly amazed by the acting ability of Tom Hanks, who has played such a diversity of roles in his distinguished career. But, by far, my favorite character in his repertoire is Forrest Gump. Within this one role, Hanks played a character who had 7 or 8 unique life experiences in completely different spaces.
To me, this is franchising in a nutshell. It is exciting. It is diverse. It has opportunities around every corner. Franchising is at work in places that you may not have ever expected. I want to share with you a survey of the franchise industry and a few of the segments where franchising exists. I think you may be surprised by some of the industries where franchise brands have deep penetration with terrific opportunities.
Let’s start by reviewing some segments where you already know franchise brands are dominant.
This is the franchise segment that is most mentioned in my casual franchise conversations because it is filled with legendary brands that we have all frequented. Think about McDonald’s, Dunkin, Applebee’s, and Taco Bell. These are all brands with thousands of locations and strong brand recognition. There continue to be new brands emerging in this space, some of whom will be the dominant players of the future.
Convenience Stores/Gas Station
The convenience store space is so pervasive in the United States that we forget that these are franchises. In fact, one of the most successful franchise brands in US history in 7-11, which is the #1 player in this gigantic space.
The car industry is PACKED with franchises in multiple different segments. The new car dealerships themselves – Chevrolet, Ford, Toyota, etc. – are all franchises! The franchise licenses are limited, and the business requires a large investment, but they are still franchises. In addition, think about all the service-related businesses in automotive. Think about Maaco, Meineke, Aamco, Jiffy Lube, and the list could go on and on. These are also well-known brands with hundreds or thousands of locations nationwide.
To me, the hotel space is one of the most interesting to consider. The name brand hotels that we frequent and have known our whole lives are most likely franchises. Marriott Courtyard, Hilton Garden Inn, Sheraton, W – all franchises! Two reasons why I love this segment – these franchises are that the historically (pre-COVID) have had astronomically high success rates, and because hotels are a big real estate play, banks love to lend money into the investment!
Here are some industry spaces where franchises have grown into a larger position over the past few years.
Those of you who have followed me in the past know how strongly I feel about the changes ongoing in the fitness world. The increasing presence of boutique fitness brands has exploded over the past five years as millennial buyers have sought different fitness experiences driven by experiential brands like Soul Cycle, Orange Theory Fitness and Club Pilates.
To supplement this demand, there has been a continual expansion of personal training (like) businesses including Gym Guyz, The Exercise Coach, and Fitness Together as well.
It has now been more than 15 years since the upward march of Massage Envy ignited a massive expansion of the franchise beauty industry. This industry segment is now filled with rapidly growing brands, including Hand & Stone, European Wax Center, Deka Lash, Skoah, and others. What fascinates me about this segment is that there is broad demand for these services, and most of these brands have fared well during the economic downturn as consumers see these services as “affordable luxuries” that they want to continue to buy.
Surprised to see healthcare in a franchise discussion? Don’t be.
The franchise world is packed with successful, well-known franchise brands. The largest market penetration has occurred in the “in-home care” segment lead by Right at Home, Home Instead, Comforcare and others. But the healthcare world also has franchises in the urgent care segment, healthcare staffing, and medical weight loss!
I also want to highlight some franchise industry segments that are simply below the radar. These are industries that have been around for decades in which franchise brands have built strong reputations and exceptional opportunities for owners.
Let’s be honest; you really don’t like to clean your own bathroom. Nobody does. For that reason, there is a gigantic, multi-billion industry around residential maid services and commercial office cleaning. The franchise leaders in this space – Jan Pro, Vanguard, The Cleaning Authority, Two Maids & A Mop – have built growing businesses by offering a needed service that recurs week after week, year after year. The result for the owners is the opportunity to build a consistent revenue stream with tons of upside opportunity.
Talk about a timely idea – all businesses related to education and support have been at the forefront of discussions for parents for the past six months, at least. Franchise opportunities in the education world are varied from tutoring – Huntington Learning Centers – to pre-school – Ivybrook Academy – to childcare – Primrose or Goddard School. The investment is these businesses range from low to high, but the demand for services continues to expand as parents seek schedule and academic help for kids from 3 months old through high school!
The home services segment is PACKED with established brand name franchises that homeowners may not even know are franchises. Think about inside the house brands such as Budget Blinds, Certa Pro Painters, or Shelf Genie. But there are tons of outside franchise brands that offer a range of services from tree servicing and bug mitigation to concrete repair and pool servicing. The beauty of these businesses is that they are typically lower investment franchises and have a flexible ownership model that can morph over time as the business matures.