15 franchising trends for 2015 you need to know about
The last time we ran a piece on the trends that are impacting our industry was back in 2013. A lot has changed since then, so here’s our update on what to expect next year.
The trends featured in our last article are still trending of course, so we’ve listed them here but haven’t gone into detail. To read more about them, go to the article here.
Trend 1: The rise of the Part Time Economy
Trend 2: The rise of the Mobile Economy
Trend 3: More legislation of franchising
Trend 4: The rise of Freedom Franchises
Trend 5: Refranchising
Trend 6: Multiple Unit Ownership
Trend 7: Franchising/eCommerce integration
Some of the latest trends to emerge have sprung out of the earlier trends. The rise of the mobile economy, for example, has spawned the mobile coffee and food truck crazes. More legislation of franchising and related to franchising has occurred in Australia, the United States and several other parts of the world. Here, then, are 8 other directions we see franchising going in.
Trend 8: Food that’s faster than fast food
It’s so fast, you don’t have to go to it, it comes to you. The ‘White Lady’ (pictured) has been an institution in downtown Auckland, New Zealand, since 1948, but now she has plenty of competition.
There’s The Food Truck, which serves gourmet fare rather than burgers and has not one, but two cookbooks to its name, Mr Woo Sushi and a host of mobile coffee vendors, including The Coffee Guy and Cafe2U. In the United States, even established brick-and-mortar franchises such as Chick-fil-A are using food trucks to serve their hungry customers even faster.
Trend 9: More laws that discriminate against franchising
This is a global trend that appears to be growing. In New Zealand, the franchise community managed after vigorous lobbying to alter Part 6A, the section of the Employment Relations Amendment Act that lumped franchisees in with large businesses rather than small ones, but in the United States, even an injunction from the IFA may not be successful in preventing the city of Seattle from discriminating against small franchise businesses as part of its new minimum wage law. Given that franchising has for years been positioning itself as a kind of middle-ground between small business and big business, we expect these laws to proliferate in 2015 and beyond — and we also expect franchising to keep fighting back.
Trend 10: The accelerating growth of franchising
Franchising keeps bucking Trends 3 and 9 — and for good reason. The world economy has largely rebounded since 2008 but some changes have taken place in how the economy is structured. Unemployment is still relatively high — very high in some countries — and much-touted jobs growth in many parts of the world has been more around part-time than full-time work. As a result, people are looking for options other than employment — and franchising, which is still perceived by many as a safer option than going into business completely independently, is an attractive option.
Trend 11: The barriers to international franchising are being lowered
While ecommerce is seen by many to be a major competitor to franchising, the internet has helped open up global franchising markets. Consumers, especially those in developing markets, see international brands as symbols of quality and status, unlike many of their local domestic brands. The internet is not only useful in communicating with franchisees and providing training and support for franchisees around the world, but also a great tool for marketing franchises in new countries.
Trend 12: Increased use of technology
We’ve seen in other trends how franchising is integrating with ecommerce and leveraging the internet for global growth, but that’s not where the use of technology ends. Automation is becoming a powerful force as the cost of labour increases. One of the hottest new franchise trends is the fully-automated or semi-automated franchise — vending machines capable of delivering healthy food, freshly heated meals and customised options, and the self-serve fro-yo outlets which let you build your own frozen confection and pay for it by weight. Franchising is also using technology for site selection, franchisee selection, franchise performance monitoring, and customer retention.
Trend 13: Franchising is breaking into new specialist fields
Franchising is traditionally associated with fast food and home services, but its benefits can just as easily be applied to virtually any industry, especially that which may be fragmented, lacking strong brand leadership or expanding rapidly. New tech businesses start up every day, created by innovation and disruptive business models, and franchising is a rapid way to establish a distribution network. Professional services such as accounting, medicine, architecture and law are the latest fields to benefit from franchising. And the trend toward customisation and specialisation is being felt in franchising as niche specialists such as Brain Balance Achievement Centres, which deal with children with behavioural, developmental and learning disorders, utilise it to expand their service base.
Trend 14: Franchising is serving the needs of Baby Boomers
Even fast food is getting healthy — really — as the population ages and people want to live longer and live better. Also catering for Baby Boomers’ needs are 24-hour fitness, financial services, in-home care and hospitality franchises. And as the Boomers retire or find it more difficult to get jobs because of their age, they have become one of the hottest markets for franchise recruitment, using their savings to start a new and more independent working life in their own business.
Trend 15: Franchisees are making their voices heard
They used to be the silent majority at franchise conferences, blithely accepting the dictums of franchisors, but finally they have found their own voices and are making them heard. Now there are franchisee associations as well as franchisor associations, and the franchisees of most major franchises have formed themselves into groups to stand up for their rights and interests. A group of McDonald’s franchisees recently made a formal protest about the lack of profit in the Dollar Menu — and those particular items seem to have disappeared from McDonald’s offering.