FRANdata In The Press
When the topic of international development comes up during strategic planning sessions, many franchisors are quick to dismiss the opportunity, citing costs or potential untapped white space in the U.S. market. Such lack of clarity can be a serious problem ‘for franchisors embarking on a rapid growth plan, often resulting in mistakes that can put the franchise at risk.
Back in the spring of 2012, less than two years after being cut from minor league baseball—his dream of pitching in the majors all but forgotten—Devan Kline, now 30, stood in a parking lot in Huntersville, North Carolina, with music blaring from his parked Dodge Challenger and led a small crowd of women through a rigorous workout regimen of his own design. It was the birth of his women-centric gym, Burn Boot Camp, founded with his childhood sweetheart, lifeline and now wife, Morgan.
The couple couldn’t afford proper gym space and used fences for wall sits, a cement ledge for tricep dips and a grassy hill nearby for bear crawls. “They believed in him,” says Morgan Kline, 30, the company’s COO and co-owner. “They tried us out, and they stuck with it. There are several women that are clients of ours today that started out with Devan in the parking lot.”
A relatively misunderstood business model, with a paucity of academic support, franchising is on the precipice of history. Defined by the Federal Trade Commission as an ongoing commercial relationship that includes a license to a brand, payment of a modest fee and the existence of significant control or support, the average consumer knows it as Subway, McDonald’s or Anytime Fitness.
The S&P 500 which has historically returned 7-10% annually is being consistently outperformed by the FRANdex, which tracks the performance of 62 U.S.- based publicly-traded franchise companies. Here are 5 franchise stocks to watch in 2018.
Each year we work with FRANdata to compile a list of the country’s largest multi-unit franchisee organizations. Based on total unit count, the rankings show not only the number of units these “mega” franchisees operate, but also their brands.
International concepts looking to break into the US market should engage the right partners and franchise experts.
Location, location, location. Once location was king. But industry ‘disruptors’ and online business have been gamechangers, says Darrell Johnson CFE, CEO of FRANdata.
“We have seen explosive growth in the home care and senior care market, largely driven by franchise brands and franchisees seeking to capitalize on the aging U.S. population,” says John Reynolds, president of the International Franchise Association’s Franchise Education & Research Foundation. FRANdata states there are about 90 senior care franchise brands with more than 6,200 franchises across the United States. The average age of these brands is 8 to 9 years old.
Some creative and precocious millennial minds have discovered an alternative to traditional entrepreneurship: franchising. According to FRANdata, a market research firm that analyzes franchise performance and operations, 9 percent of all franchises are currently owned by millennials, and the trend is growing. Over the next 10 to 15 years, the majority of existing franchisees will be approaching retirement, while in that same timeline, more millennials will reach the capital threshold needed to invest in a franchise.