TRENDING FRANCHISES: EMBRACE CHANGE TO STAY STRONG
Although franchising as a business model didn’t become a major trend in Australia until the 1970s, it didn’t take long for that trend to grow roots and turn into something more—a tradition.
Half a century on, and franchising is now the norm; according to the 2016 Franchising Australia survey, there are currently more than 1,100 franchise systems and approximately 79,000 franchise units in Australia, contributing on average $144 billion to the Australian economy each year and generating almost half a million jobs.
And while many franchises have taken a beating this past year due to the global pandemic and subsequent hit to the economy, a remarkable number of franchises were able to get back up, dust themselves off, and become stronger than ever.
The hottest trend? Resilience!
Franchises that are showing resilience in the face of adversity are the ones that have embraced new trends to stay relevant. The ones that have adapted new systems and protocols to keep customers safe, for example, or the ones that have embraced online alternatives to in-person services, or the ones who see future demand for sustainable products and react to meet this need—these are the franchises that are ensuring their franchising system continues to be a trending, relevant one.
Many of the changes we have seen in the past year to the way businesses operated were adapted virtually overnight. Some had already been developing over many years; developments like cashless payments, e-commerce stores and home delivery for a wide cross-section of takeaway options have been the norm for some time now. But other developments like QR scans, hygiene stations and social distancing were sudden and reactive. But after sorting out the initial teething problems, franchisors who rallied to quickly react to, and implement, these changes were able to adjust, adapt and survive.
The pandemic also opened up opportunities for some franchises and demonstrated how quickly franchise systems can respond quickly to unexpected change. When considering a resilient franchise, take a close look at the ones that have been thriving during lockdown and examine what innovations they introduced and how they managed their business, their people and their future strategies during that tumultuous time.
Franchisors looking to the future
Looking to the future, many of these changes are likely to stick around. Customers are likely to continue to appreciate the convenience of home shopping from an online store, menu ordering apps, mobile repair services and increased hygiene and safety standards in home care, health, beauty and fitness services.
Over the past year, many franchisors have also been stepping up to support their franchisees. In a Franchise Council of Australia (FCA) survey, 94 percent of respondents provided examples of the support their franchise networks offered during the pandemic, including direct and indirect financial assistance to help with navigating changes in business regulation. The good news is this seems like a trend that will continue well into the future as franchisors and franchisees realise the benefits of a strong support network in building resilience and longevity.
The franchises that pay attention to trends by listening, observing and reacting to the needs of their franchisees and their customers are not only making sure their business stays afloat during changing times, they’re building the business traditions of tomorrow.
Tips for Choosing a Trending Franchise
Whatever kind of franchising opportunity you are considering, keep in mind these important tips before making any big decisions on your franchising future.
- Trend vs Fad: Some business ideas are here today, gone tomorrow. Taking a risk on investing in a shiny new business proposition can be rewarding, but risky. If you are looking for a trending franchise that offers a safer investment, look for a franchise that has an established track record balanced with a keen understanding of business trends. For example, it might be traditional retail store with household brand name recognition, but one that also offers automated online sales.
- Due Diligence: A key piece of advice for all new franchisees is to thoroughly conduct due diligence. This is especially true if investing in an up-and-coming trending franchise. Do your homework, carefully read the Franchise Disclosure Document (FDD), attend networking events and discovery days, and talk to other franchisees. Learn what fees, licensing and royalty arrangements are in place. Don’t be afraid to ask lots of questions. A franchisor with a reputable business proposition with established processes in place should be able to answer all your questions, confidently.
- Future Thinking: Does the business have longevity? Are the trends they are implementing value-adding to the long-term profitability and trustworthiness of the brand? Again, what you do with the answers to these questions depends on what kind of investment you are seeking. If you are up for a risk and looking for a franchise that will turn a profit in a short space of time, a ‘trendy’ franchise like a fun and quirky food franchise (think Kramer of classic TV sitcom Seinfeld’s out-there business idea of a “pizza place where you make your own pie!”), may be just the ticket. But if you are looking for a franchise with at least a five-to-ten-year commitment, consider whether the product or service being provided will still be popular or in demand far down the track.
Franchising trends on the move
Here is a snapshot of some of the kinds of franchises that have showed resilience during the pandemic and look set to continue in popularity:
From food trucks to food delivery, and from auto repairs or computer repairs, more service providers are tapping into the demand for services that head straight to the customer rather than the customer travelling to a bricks-and-mortar location. Born out of necessity over the past year as people and businesses were forced into on-and-off lockdowns, the simple convenience of having a service provider come to you to you is not a trend that is likely to disappear.
As climate change and other environmental issues continue to remain front-of-mind for many customers, particularly millennials, franchises that are invested in green processes or products that help reduce our carbon footprint are rising in popularity. Some franchises are focused on zero-waste, by introducing products that recycle and reduce waste like long-term, repeat-use cutlery, toiletries and cleaning products. While other franchises are specialising in solar panel installation or window double-glazing to improve house insulation.
Pets and Kids
In a simple case of supply and demand, franchises that cater to both children and the beloved family pet are making an impact. Far from being the ‘special treats’ or ‘nice to have’ services they were in the past, people are increasingly demanding high-quality services for the special ones in their life. Parents are spending more on their children’s education through personal tuition franchises, investing in health through kids’ sports groups and play centres, and seeking only the best in day care providers. Puppy parents are also keen to spend big on day care as well as pet training and pet grooming services.
Explore all franchise opportunities—from traditional to trending—in the Business Franchise directory: https://www.businessfranchiseaustralia.com.au/directory