Last week I wrote about how the franchise industry has it wrong. But don’t misunderstand me, that doesn’t mean the future of franchising isn’t bright. In fact, the breadth of the franchising industry is pretty staggering.
Red Boswell writes on the FranchiseWire blog that the 2023 will be the best year ever in franchising. He says there are 12 reasons why the future looks bright for franchising. I go through his points below adding some of my own comments. Make sure to read his article. I did find his perspective interesting.
- Franchise Brands are joining forces. Boswell says there are strength in numbers. With brands joining forces the organizations are becoming more professional with stronger systems and support for franchises.
- Franchising is attracting more professionals. I have been noticing this for many years. Former corporate managers and executives are turning to franchising as the alternative to start their own businesses.
- Franchise consultants are going mainstream. Here’s one to be careful on though. All franchise consultants are not the same. Find a consultant that is independent and not beholden to any particular franchise brand(s). Joel Libava has an entire guide on how to hire a franchise consultant.
- Private equity loves franchising. In my experience that is a positive but at times is also a negative for franchisees. Private equity loves franchising, but mostly private equity loves making money. So often the founder driven franchise changes when private equity takes over, sometimes for the better and other times not so much. But I agree that private equity allows for more sustainable growth.
- There are more ways to get together. There are many conferences and events to connect and learn about franchising.
- Innovations are making franchises better. Many franchises are leveraging technology to improve their brands.
- Franchise education is growing. Colleges and universities are introducing franchise and entrepreneurship majors bring more educated and qualified people to the industry.
- The industry is prioritizing inclusion. There is always work to be done in this regard but I agree the franchise industry is working on becoming more diverse.
- There are more franchise opportunities in more sectors. Franchising is not just fast food. One of the largest growing segments is the home services industry where I have had several clients buy franchises over the past couple of years with success.
- There is a wealth of information about franchise opportunities. There are so many sites out there about franchising you could drown. Find reputable sites that provide independent information. (I’ll write a blog post on some of my favorite reliable sites soon).
- Financial Disclosure. Item 19 of the FDD allows franchisors to disclose their financial performance representations. More and more franchisors are taken advantage of the opportunity to inform prospective franchisees of their finances. Always be sure to investigate these financial performance representations carefully.
- Franchising Support. Boswell points out the the International Franchise Association (IFA) is always advocating for the industry. This is true. As a prospective franchisee though, always try to find independent sources. As an example the IFA loves to tout that franchising gives you a better chance to be successful than independent businesses. The truth and the reality is that franchise businesses fail at roughly the same rate as independent businesses.
What do you think? Do you see a bright future for franchising?