Franchising 2022

What is hot? What is trending? A lot of the same industries & brands that were in 2021. We are seeing a younger buyer & an increase in women entering franchising.
The increasing number of semi-passive franchise models being offered, allow that young enteprenuer to keep their day job & family benefits and build something significant on the side. Some of the service-based brands have total project costs south of $150k (includes your working capital). SBA has a $150k project cost loan available. They are usually asking that you pay the franchise fee out of pocket & they will finance the rest. These loans are getting done four to six weeks faster than early 2021.
Many of the service-based brands are home based and we do not have to deal with the real estate piece and will get the location opened faster and for a lot less money. If real estate is involved with a build out it will usually be 9 months or longer before you open. Home based service based 2-4 months.
The one substantial change from early last year is we have a shortage of workers. Many of you want to look at business models that would require the fewest amounts of employees. Understandable & those brands are out there.
Try getting something done at your house. You want new windows, a new roof, new siding, or your driveway repaired. If you do find someone to come out for an estimate how long will it take to get your project done? 3 months? 6 months? They do not know. If you open a service business in this environment and offer customer service, you should soar with the eagles.
Here are the categories that are seeing some movement:

Health & Wellness

Huge movement in new franchise sales and a growing increase of brands in this space. All these models are semi-passive with investment levels from 225k to over one mil. Has a huge recession resistant piece since folks need these services regardless of their financial position? Small staffing requirements and bankers’ hours. Internal help with insurance claims.

Pet Services

A repeat from last year. Sixty-seven percent of the American households have a dog, a cat or both. There was a huge increase in dog adoptions in 2021. People spend money of their kids, their pets and then themselves. All these pets need to be walked, trained, and boarded. Investment levels usually start around $325k. and go up over 1.2 mil.

Disaster Restoration

Another repeat from last year. Recession Proof industry with 14,000 water damage claims per day in the U.S. All these brands do mold mitigation & sanitizing of public places. $165-$500k investment. This would be a full- time commitment from you or another family member. Franchisors in this space have relationships with insurance companies. Others may pass over residential referrals from their commercial division.

Real Estate Based Companies

Become a landlord in the commercial space. The least amount of time investment weekly of any of the semi-passive brands. Investment levels $850k to 1.2 mil. Typical out of pocket $300k. The franchisors have financing relationships. High-occupancy rate & little to zero failures.

Home Based-No Employees

Smaller investment-usually under $100k, Monday-Friday business models We saw a franchisor in this space add forty new locations (They already had 250) in 2021.

Service Based Models that Fix, Replace or Repair Something that Requires Employees

Huge increase in franchise brands in these space & new franchisees in 2021. Investment levels usually between$130k to $225k. Some of these are full time commitments and others can be done semi-passive. The franchisor would prefer you did not have a background in the industry. They are looking at your skill sets in running a small team of people, sales aptitude, or both. Many of these business models are Monday thru Friday for those of you looking at the lifestyle component.

Off-Site or On-Site Storage

We saw one brand with 20% sales increases 20 over 19 & it happened again in 21 over 20. Lots of assets, few employees with total investment levels at 1.1 mil. We have seen folks with net worth’s at a mil plus get into this business for around $200k cash infusion. You can keep your day job.

Is 2022 the year for you?