Joel Libava
2018 is going to be a game-changing year for franchising. For lots of reasons.
But before I share the top franchise trends and predictions for 2018 (including useful tips on how to go about choosing and researching a franchise in 2018), it’s important for you to have an overview of our current economic situation. In short, because the economy always affects the franchise industry.
First off, the economy (as of this writing) is on an strong upward track.
(Please note: The economy is always fluctuating.)
Here are the 2020 franchising trends.
For example, U.S. retailers reported that year-end holiday retail sales rose 4.9% compared to the same period last year. That’s quite an increase. That finding is based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
Secondly, unemployment is super-low.
As a matter of fact, in 2017, according to the Whitehouse, “Thirteen states have seen their unemployment rates drop to the lowest levels ever recorded since the federal government began keeping track of state-level data more than four decades ago.”
That’s great news.
Unless you are a franchisor, or someone who sells franchises for a living-like franchise salespeople or franchise consultants.
Keep reading.
Low Unemployment Is Good For The Economy
When most of the population is employed, a lot of good things happen.
For instance, according to Career Trend…
“During a strong economic cycle, low unemployment essentially feeds itself. Businesses do well because Americans have money to spend. Major sectors of the economy, including housing, banking and retail, are stronger and more stable during periods of low unemployment because people have income to pay the bills.”
Now, I don’t know about you, but I’ve experienced unemployment first-hand.
In brief, when I was growing up, my dad worked in management for several large companies.
Generally speaking, when you’re in management, lots of stuff can happen-including getting downsized. Well, it happened to my father several times. And each time, the atmosphere in our house turned extremely tense, as bills still needed to be paid.
In addition, I’ve been downsized myself. Believe me, losing your job changes everything. Hopes and dreams are extinguished. All in all, it’s a very depressing time.
In the final analysis, being employed is way better than being unemployed. Maybe
Low Unemployment Can Be Bad For Franchising
It’s true; when good, well-paying jobs are readily available, interest in starting a franchise business-heck any type of business, declines. That’s because there’s not enough career pain.
The fact is when people are gainfully employed, they’re less apt to leave their jobs to start a business.
For example, if you were making $120,000 a year, and were reasonably happy at work, why* would you want to walk away from a nice salary to take on the risk of starting a business?
*If you feel you do have a good “why,” in other words, if you feel you have a good reason to quit your job and start a business, and you’re in a good enough financial position to do it, maybe you should go for it. Take your shot. I’ll be rooting for you. (Just do your homework!)
Interest Rates Are Low
If you’re looking to get a small business loan for a franchise, interest rates (as of this writing) are still attractive.
And even if the Fed raises rates 2-3 times-as predicted in 2018, they’ll still be low enough to consider starting a business.
Positive stuff, right?
So, how will franchising do in 2018?
My predictions, along with important franchise trends to watch-and potentially take advantage of, follow.
The Top Franchise Trends And Predictions For 2018
To begin with, it was predicted last year that the number of new franchise units would grow by 1.6%. So, based on that, there would be a total of 744,437 total franchise business locations up and running in the U.S. by the end of 2017. Read more
Now, since the post your reading now is a January 2018 post, we’ll have to wait and see how that prediction panned out.
Prediction: The 2018 new franchise unit growth trend will stay about the same. I’m figuring unit growth will be between 1.5% and 1.8%. Here’s why…
As I stated above, low unemployment numbers don’t bode well for franchising.
As a result, the pool of prospective new franchise owners won’t be as large as it has been-like when unemployment rates were closer to 8%.
For franchisors, this means that every prospective franchisee will have to be schmoozed more. Franchise salespeople and franchise consultants will have to tread carefully…in other words, aggressive sales techniques can’t be used.
To put it differently, a smaller pool of would-be franchise owners means salespeople can’t push too hard, because there won’t be as many people in the pipeline to go back to if they lost a would-be franchisee off with their aggressive tactics.
Prediction: Franchise organizations will have to invest more in sales training. As a matter of fact, if they really want to do it right, they may want to consider hiring a sales training/coaching franchise like Sandler, or Crestcom.
Prediction: This Unique Business Model Will Grow
All things considered, there is some good news, in what will be a pretty flat year for franchising, growth-wise. Check this out…
One business model in franchising, if implemented by more franchisors-and fast, is the “Keep your job while starting a franchise business” one.
That’s because more people have jobs…good jobs. Jobs they want to keep as long as they can.
However, there currently aren’t that many franchisors doing this. But, more will. They’ll have to.
With this in mind, there’s one franchise organization that has been successfully implementing this business model for years. And, I’ve talked about them before.
The name of the franchise is Great Clips. From their website:
“Franchise ownership is not an absentee business. At Great Clips, we encourage our owners to keep their professional careers—if they so choose—but we need a hands-on leader at the helm. While ownership doesn’t require a daily presence, as all of our salons are manager-run, we like to recruit owners that know how to manage the manager, delegate, and lead. “
Picky, Picky
Now, before you get too excited, you need to know that the Great Clips franchise development team is extremely picky when it comes to awarding franchises.
Not only that, you’ll need to qualify, financially, for their multi-unit opportunity.
In addition to hair care franchises, some of the other types of franchises that are open to manager-run units include those in the fitness and retail sectors of franchising.
***Just Added***
A Joel Libava Radio Interview – Discussion of the 2018 franchise trends and predictions on the Small Business Advocate Radio Program.
A Tip For Franchisors
If you want to attract prospective franchisees in 2018 and beyond, find a way to create a new “manager-run” business model for your concept. Doing so could help your franchise system grow. A lot.
Warning For Franchisors: Make sure you do this right. Don’t just slap something together, willy-nilly. It’s going to take some work, and an investment. Consider going outside your organization for help creating and implementing a new model.
Franchise Sectors To Explore In 2018
If you’re looking to buy a franchise this year, the franchise opportunities mentioned are worth* investigating.
*They’re worth investigating as long as you’re a good fit for them, and you have the financial qualifications needed.
Franchise Tip #1: Read my comprehensive “How To Buy A Franchise” article-in its entirety, so you can learn the exact steps needed to buy a franchise.
Senior Care Trends
Although there are over 100 different franchise opportunities now being offered in this popular sector, investing in a senior care franchise is definitely worth a look.
To begin with, check out the numbers in the bar graph below-especially from 2010-2050.
According to a report published by the United States Census Bureau…
“The projected growth of the older population in the United States will present challenges to policy makers and programs, such as Social Security and Medicare. It will also affect families, businesses, and health care providers.”
As a rule, buying a franchise that leverages a specific demographic trend taking place-like senior care, can be a good move. You should investigate this area of franchising now.
But, where should you begin? What franchises in this sector are worth a look? My answers to those questions are below.
Senior Care Franchises For 2018
If you ask anyone (who’s been around franchising for a decent amount of time) to name a senior care brand that’s at the top of the heap, this one, in most cases, will be the one mentioned:
BrightStar Care
Years ago, when I was a commission-based franchise consultant, I had the pleasure of meeting Shelly and J.D. Sun, the founders of BrightStar Care. I was immediately impressed with them, but there was more. The “more” I’m speaking of was the feeling I had after talking with them. After spending a little quality time with them. I knew they were going to be successful. Very successful. Check out their franchise website to learn more about what I consider to be a top-shelf senior care franchise.
P.S. Shelly wrote a book on franchising a business. You should read it.
Other senior care franchises to look into include, Comfort Keepers, Right At Home, and Seniors Helping Seniors.
Another Type Of Senior Care
The senior care franchises mentioned above have one thing in common. They require a lot of employees.
Now, I’m not talking only about the office staff you’ll need. Instead, I’m talking about the dozens and dozens of caregivers, both medical and non-medical ones…employees, you’ll need to hire and keep on your payroll. (Not that there’s anything wrong with that.)
The bottom line: If you’re used to managing a staff, and feel that doing so is part of doing business these days, by all means buy a franchise that requires employees.
But, if you’d prefer not to have employees, but still want to own a franchise business in this busy sector, check out the next franchise opportunity.
Next: The Food Franchise Trends For 2018
Food Franchise Update: Subway®
Before I share a few food franchises you need to know about in 2018, I need to tell you what’s been happening with one of the most popular food franchises of all time.
Subway, which is the largest submarine sandwich franchise in the world, is having “issues.” BIG issues.
And interestingly enough, their main issue has to do with size.
From a Business Insider article written in December:
“The New York Post reported that roughly 400 franchisees were protesting the chain’s plan to bring back the $5 footlong deal. On Monday, Subway’s head of North American marketing, Karlin Linhardt, resigned from the company. And traffic has fallen 25% over the past five years, the Post reported, citing an internal memo it obtained.”
News like that is never good if you’re a franchisee.
Could A Subway Franchisee Uprising Be Brewing?
With more than 44,000 locations around the world, the Subway imprint is definitely massive.
So, when hundreds of franchisees complain-in unison, word gets out. On the franchisor side, it can make it difficult to sell new franchises.
In addition, if enough unhappy franchisees exist, the franchisor may have to do things they don’t want to do. Things that will cost them money. Want some proof?
McDonald’s Franchisees Force A Change
A few years ago, McDonald’s-and the problems they were having, were all over the news.
From an article I wrote:
“Several McDonald’s franchisees in California forced a meeting with representatives of McDonald’s Corporation in order to air their ‘concerns’ last year. Some of these concerns revolved around The Dollar Menu and what it’s been doing to their profit margins as franchisees.” McDonald’s management caved (they had to) and the menu boards at McDonald’s now feature The Dollar Menu and More.
The bottom line: Sometimes, if enough franchisees complain, change happens.
Prediction: Subway won’t make the changes needed to get them back in the game.
One reason for my prediction; the current Subway CEO is the late founder’s sister. And even though I’ve never seen her personal financial statement, I’m going to go out on a limb and say that she’s a multi-millionaire. (Can you imagine how it must feel to receive thousands upon thousands of royalty checks from her franchisees, month in and month out?)
I can. It looks like this:
In the final analysis, she may not feel a need to change anything.
Now, let’s discuss a few food franchises that could be good ones to buy in 2018.
Food Franchise Opportunities
The one franchise trend I’m really paying attention to in food: Personalization.
The best example of this growing trend is Chipotle.
Today’s consumers-especially millennials, want their food prepared their way. And Chipotle has been doing that from the get-go. Unfortunately, you can’t buy a Chipotle restaurant. (Chipotle restaurants are company-owned. The company does not sell franchises.)
But, don’t worry. Other food franchises are making personalization their focus. Like Blaze Pizza, for instance. That’s the one with this famous spokesperson.
(Blaze Pizza employees personalizing pizzas for customers.)
A Blaze pizza features made-from-scratch dough, along with healthful, artisanal ingredients.
FYI: Blaze Pizza has taken the country by storm, so, franchises may not be available in your area.
Visit the Blaze Pizza franchise website to find out more.
More Pizza!
Another entrant in the personalized pizza niche is Your Pie.
At Your Pie franchise locations, customers can build their own pizza, even including the type of dough they’d like their pizza baked with. Then they can choose from a variety of sauces, cheese and toppings they want. In only 4 minutes, their hot, personalized pizza will be delivered to the table.
If you’d like to learn more about Your Pie, and the franchise opportunity they’re offering, check out this article.
Franchise Tip #2: Make sure you understand what it takes to own and operate a food-service business. It’s a business that requires a lot of energy and a lot of patience, as you’ll see in this article I wrote for Small Business Trends.
More Food Franchises For 2018
Since the food franchise arena is so popular, I think it’s important to mention a few other food franchises that are worth a look in 2018. They are:
Hwy 55 Burgers, Shakes & Fries
From their website:
“Hwy 55 Burgers Shakes & Fries fits a niche between fast food and casual dining, offering our guests the best benefits of both. We provide the convenience of fast food, with rapid response times and an affordable menu. But there’s a twist: our freshly-made food is a much tastier alternative to your typical frozen, pre-cooked hamburgers and french fries.”
With a cool name and 1,000 locations under development, Hwy 55 looks to be an up and coming player in the world of burgers and the like. For more information, visit their franchise website.
Popeyes®
You may not know it, but Popeye’s is one of the largest QSR chicken restaurants in the world. That alone makes this still-growing fast-food franchise worth a look.
“Popeye’s offers a unique New Orleans style menu featuring spicy chicken, chicken tenders, fried shrimp and other regional items. The chain’s passion for its Louisiana heritage and flavorful authentic food has allowed Popeyes to become one of the world’s largest quick service restaurant chicken concepts with over 2,600 restaurants in the U.S. and around the world.”
I suggest reading more about Popeye’s, including the history of the chain, along with the things that make their business model unique.
P.S. My wife tells me that their mashed potatoes and biscuits are to die for.
Capriotti’s Sandwich Shop
In 2015, one of Capriotti’s sandwiches was named “The Best of The Best,” in the Las Vegas Review Journal. (Think about how many restaurants there are in Vegas.) Since then, franchise sales have really taken off.
Not bad for a brand that specializes in turkey sandwiches and has a CEO who thrives to be “The dumbest person in the room.” Look
Go here to learn more about Capriotti’s, and find out if there’s territory availability near you.
Del Taco, unit-wise, is the 2nd-leading brand in the Mexican QSR category.
The Mexican-food segment has been growing for the past few years, and with 550+ franchises around the country, Del Taco has definitely become a serious player.
The Del Taco menu includes classic Mexican dishes like tacos, burritos, quesadillas and nachos, and even a few American favorites, like hamburgers, crinkle-cut fries and frosty shakes.
If you’re looking to own a food franchise, Del Taco is looking for growth-minded candidates. Here
Prediction: Mexican QSR food restaurants will continue to grow in volume-and unit sales numbers will climb in 2018.
Finally, I’d be remiss if I didn’t mention one of the newest entrants to this growing segment: Firenza.
As the the owner of a Firenza franchise business, you’ll provide customers hand-crafted made-to-order, stone hearth-baked pizzas that can be customized with 35+ fresh toppings. They include house roasted garlic, creamy mozzarella ovalini and even lean grilled steak.
Information on this emerging franchise can be found on the Firenza website.
Next: The 2018 Retail Franchise Trends
Franchise Tip #3: Before you look at becoming the owner of a franchise, make sure you get the real facts about franchising. Here they are
Things To Know About Retail
According to the National Retail Federation, retail businesses are responsible for 1/6 of the national Gross Domestic Product.
But what about Amazon?
As it turns out, today’s consumers still like shopping for items in-person. Check out this infographic.
Brought to you by: https://www.timetrade.com
With this in mind, you should explore retail franchise opportunities. But, only ones that offer multi-unit ownership options.
But before I share a few retail franchise business ideas for you to investigate, there’s something else you need to know about retail. And this “something” is crucial to your success.
That’s right. The location (s) of your retail franchise business.
Franchise Tip #4: Don’t let a few hundred dollars stand in your way. If one location has more traffic, and more potential, but it’s a few hundred dollars more, don’t walk away because of price. That extra few hundred dollars a month in rent may end up translating into a few thousand dollars more in revenue.
From the Franchise Direct, Retail Franchise Report:
“When searching for a prime location for your retail franchise lean on all of your avenues for knowledge including yourself and, particularly, your potential franchisor. Franchisors have tons of data about what places will work best for their franchise brand. Furthermore, most franchises require franchisees to locate their franchise within a specific, franchisor-approved area.”
Speaking of location, there’s a great resource you can use that can help you gather the local area data you need. (Like retail space, cost per square foot and traffic numbers) And it’s actually a free resource.
The resource: Small Business Development Centers, (SBDC’s) which are hosted by several leading universities and state economic development agencies. They’re funded in part through a partnership with the U.S. Small Business Administration. (SBA) Currently, there are 900 service sites for you to choose from. Learn more about this free resource
There’s one more thing you need to be aware of when it comes to choosing your franchise business location.
“In almost every case, both parties must agree on the choice of location. For example, if the franchisor doesn’t think that the location you have in mind will be a good one, they’ll tell you. On the flipside, if the location they have in mind for your new franchise doesn’t feel right, you can object to it.”
That information was from an article I wrote for the SBA on franchise locations.
(FYI: Ace Hardware is a franchise business.)
Retail Franchises For 2018
The following franchise concepts offer multi-unit ownership.
As I stated, if you’re going to buy a retail franchise this year, your strategy should be to own multiple units in a specific geographical area. That way you can control the area, and if the franchise concept you choose is really strong-you can dominate that area. Make sense?
FYI: In order for you to invest in multi-units, your net worth needs to be at least $650,000, with enough liquid capital to support a growing (and new) business. A business that has to pay rent, buy and maintain inventory and fund payroll-from day one.
Opportunities In Retail Franchise Ownership
As you may know, more and more small businesses are shipping physical products-ones that are being purchased and paid for online. And guess what: They need a reliable place to ship from. That’s where you come in, if you want to get into this retail space.
With 5,000 locations in North America, The UPS Store needs almost no introduction, as it is a well-known brand.
Franchisees of The UPS Store offer several shipping, freight, postal, digital online printing, document and business services in a retail setting.
One more thing: The UPS Store can be a great family business-especially if you own more than one location.
Another franchise opportunity in the packing and shipping space is Craters & Freighters. But their shipping franchise concept is a little different.
From their website:
“Craters & Freighters offers crating and packaging solutions for high value, heavy, fragile and unique items. Most pack and ship companies have weight and size limitations, Craters & Freighters has the solution.”
Currently, Craters & Freighters has 65 locations up and running, and corporate is looking to develop more areas of the country.
Trend: Smartphone Use Continues To Grow
With more and more consumers (and businesses) buying Smartphones, you need to look at how one franchise is leveraging the industry.
The name of the company is Kix Mobile. Here’s what they’re doing.
With the shift to Smartphone replacement rather than repair, Kix Mobile Xchange-Repair™ is perfectly positioned. Franchisees get to offer a new and super-innovative approach to device sales and repair; They provide fast and easy device/data exchange-for one very reasonable price.
In other words, you bring your messed-up iPhone or Droid into a Kix Mobile store (maybe the camera is broken), and an employee hands you back a high quality refurbished iPhone or Droid with your data restored-again, for a very affordable price.
If you’d like to learn why consumers are moving towards refurbished Smartphones, and get more information about owning multiple locations of this up and comer, go here.
Franchise Tip #5: Newer franchise opportunities offer one thing that most “seasoned” franchises don’t: First dibs on location. wouldn’t it be great if you cold control an entire area with 3-4 franchise business units?
This is how to research a newer franchise opportunity.
Waxing?
That’s right; waxing. (Not Carnuba)
I’m referring to this type of waxing:
Waxing the City is a retail franchise business with more than 80 locations across the country. Focusing only waxing, Waxing The City is a facial and body waxing studio for both men and women. (I didn’t know men did that.)
Furthermore-and I found this interesting, Waxing The City franchisees use “employer of choice” strategies. That means they’re committed to training for the long-term, so they can provide rewarding careers in the salon industry. (Less turnover.)
Information on investment amounts and more can be found on their franchise information website.
Plato’s Closet®
Who would have ever thought that stores that sold gently-used clothing would be a viable business?
Well, they are viable, and Plato’s Closet stores are consistently busy* places.
From PlatosCloset.com:
Most of our stores buy and sell girls sizes 0 to 22 and guys sizes 28 to 40 waist, and we typically buy current styles that are still in the mall.
The brand names they carry include:
- Aeropostale®
- Free People®
- Hollister®
- Lululemon®
- Pink by Victoria Secret®
- Tory Burch®
And many, many more.
*Personal experience shows that Plato’s Closet stores are busy.
In my case, I remember several instances in which I’ve watched my Smartphone’s battery icon fade to almost nothing as I was sitting in my chariot waiting for my daughter (who told me she’d only be in the store for 10-15 minutes) to reappear.
Daughter: “Sorry Dad! It was really busy inside.”
Me: “I know honey. I know. It’s okay. I saw lots of people going in and out while I was sitting here. “
If you’d like to own what looks to be a consistently busy retail store, go to the Plato’s Closet franchise website to find out how.
More Franchises To Check Out In 2018
One trend that’s been on an uphill trajectory since I don’t when, is pet ownership. And in my experience, there are a 3 different types of “pet people.” There are:
- Cat people
- Dog people (Me)
- I don’t like animals in my house people
Which one are you?
(That’s my friend Greg George’s dog, Snoop.)
In any event, the amount of money consumers spend on their pets is sick.
And if you like pets, it would be silly not too at least look into owning a pet-related franchise.
Automotive Franchise Business Opportunities: 2018
Automotive franchises are big business, too. Especially with the number of cars are the road these days.
Find more statistics at Statista
That’s one reason that franchises like All Tune & Lube now have 3 different automotive franchise concepts under one roof.
In addition to making sure their cars are running properly, today’s consumers want to keep their cars looking nice, too. That’s why low-investment franchises like Color Glo International are really prospering. Read why
Highly-Specialized Franchise Businesses
Intense weather conditions and events seem to be affecting more and more areas of our country.
Because of that, businesses that specialize in disaster cleanup and restoration
are becoming more visible.
Some of the franchises in this growing sector include, ServiceMaster Restore®, Rainbow International Restoration, Steamatic, and 911 Restoration.
Two Travel Franchises For 2018
U.S consumers spend a lot of money on their vacations. That’s mainly why franchises like Cruise Planners and Expedia CruiseShip Centers keep growing and growing. (Plus they’re low-cost opportunities.)
Travel franchises are worth a look-especially if you’re a seasoned-traveler yourself. And some of them are home-based, which brings startup costs way down.
Fitness Franchises
Finally, franchise opportunities in the world of fitness are experiencing seemingly non-stop growth-and will continue to in 2018. Currently, there are over 100 DIFFERENT fitness franchise concepts being offered for sale.
The two that immediately come to mind are doing an incredible job with their branding, and because of that, are totally differentiating themselves from other franchises in this sector. They are:
1. Fitbody Boot Camp, which promotes a high energy, fun, and challenging workout designed to burn maximum fat and tone your entire body in 30 minutes flat.
Bonus: The founder, Bedros Keuilian, is quite different than most of today’s franchise executives. Look
He’s someone I’d really like to meet.
2. Orangetheory Fitness
Featuring what ”The Today Show,” Shape magazine and Men’s Journal call the best one-hour workout in the country, Orangetheory is currently the fastest-growing fitness franchise around. See why here
In Conclusion
If you want to explore the idea of being your own boss in 2018, and feel that owning a franchise is a good way to do it, you certainly have a lot of choices. Good choices.
However, as you’re looking for a franchise that you can hopefully be successful owning, remember that there are a lot of things that you can’t control.
I’m referring to things like the U.S. economy, the Global economy (which affects the U.S. economy) and politics-to name just a few.
Conversely, there are a lot of things you can control.
To find out what they are, make a commitment to take the time needed to:
- Study up on how to best choose a franchise
- Find out how to research a franchise
- Learn how to write a business plan
- Apply for a small business loan
- Sit down with a franchise lawyer
Finally, if you end up buying a franchise in 2018, please let me know.
Chipotle image courtesy animakitty, Flickr
Subway image courtesy Vincent Desjardins, Flickr
Senior care image courtesy of CQC Press Office on Flickr
Ace Hardware image courtesy of Scott Lewis, Flickr
Note: When you buy through links on this website, we may earn an affiliate commission. In addition, I've started to use AI to help me craft better article titles and headings.
