What are the Franchising Trends for 2013?
The Whichfranchise team did some research on trends emerging in franchising and the categories due to grow this year.
A big trend in developed markets like the UK and USA is the “better burger” or gourmet burger, where chains focus less on mass production and more on taste and customisation. GBK is a chain in the UK offering burgers with exotic toppings such as blue cheese in a sit-down restaurant environment. In the USA, one of the fastest growing brands of the past five years is Five Guys, a no frills quick service restaurant offering burgers with a home-made feel and a choice of toppings. The chain opened 1 000 stores in 5 years! It will be interesting to watch the trends in food franchises in South Africa this year, especially since Burger King is now entering the market.
Frozen yoghurt grew massively in the USA over the last couple of years, with the emergence of brands like Red Mango and Pink Berry. The basic concept is to offer various flavours with a choice of toppings. In the USA, this is now nearing saturation with a low barrier of entry seen as one of the reasons for this. The trend seems to be taking off locally and new brands are emerging.
Fast food gets healthy
The ever increasing focus on health and wellness is now also permeating the fast food category, with more options on the health side and health franchises emerging. US legislation is also forcing brands to divulge nutritional information such as fat content. Dunkin Donut’s is even planning the launch of gluten free products!
The international trend of awarding multiple franchises in an area to one operator is also growing locally. The benefit to the franchisor is that they only deal with one franchisee who grows its own infrastructure. However, franchisees wanting to become multiple franchise holders need more access to capital. The good news is that banks also like to deal with multi-unit franchise holders and raising finance is easier, as they generally have a strong track record and have proven their operational capability.
Franchising for over-50’s
People in this age bracket are increasingly entering the franchise market for various reasons. It could be due to forced early retirement, corporate downsizing, a lack of retirement savings and the fact that due to better health care, many people are fit and able to work well into their later years. Franchises suitable for this market include business service franchises, business coaching franchises, training and development franchises and many others. Over 50’s normally have access to capital and good experience, which makes them attractive to franchisors and banks. Whichfranchise will put more emphasis on this category in the near future.