America’s Franchise Forecast

As the cities and counties of the United States continue to flourish, the outlook for franchising in 2006 and beyond is ripe for growth. As the population grows, so do their needs for a wide variety of products and services, almost all of which fit into the franchise arena. According to the International Franchise Association, there are 767,483 franchised businesses that generate jobs for 18,121,595 Americans, which is nearly 14 percent of the nation’s private-sector employment. Franchises also generate $506.6 billion in payroll, which is 11.1 percent of the private-sector economy. All of these figures are expected to increase in 2006. So what are the hot trends in franchising for 2006?

Education
The need for supplemental education is paramount as students continue to score below national averages on proficiency exams in math and reading. Learning centers and tutoring franchises that provide high quality counseling, testing and instructional services will fill this need and play a significant role in preparing students for post secondary study and successful careers. The No Child Left Behind Act of 2001 has provided schools with about $2 billion a year in federal funding for activities such as tutoring and enrichment programs. Since most schools do not have in-house tutoring programs, they turn to third-party providers such as franchises.

Fitness and Weight Loss
The fitness and weight-loss categories experienced significant growth last year and all signs indicate they will continue to do so in the coming year. Issues such as obesity and diabetes are still prevalent and these factors affect the industry. More and more, Americans are starting to realize that the age old prescription for regular exercise and a balanced diet will bring the best results. According to the International Health, Racquet & Sports Club Association, the number of U.S. health-club members at the start of 2005 was 41.3 million, up from 39.4 million in 2004. Another related trend, gyms exclusively for women should continue to be strong in 2006.

Business Services
These franchises allow small businesses to outsource their needs for everything from signage to IT services. Since small businesses play such a big role in our economy, business services franchises continue to grow, making it easier and more convenient for small business owners to outsource their needs. Anything a small business owner might need to run his operation, this sector offers, from a company like commercial cleaning, a printing and graphics company, to one that handles shipping and copying.

Home Improvement
The strong housing market is driving growth in this industry. According to Standard & Poor's in its semi-annual survey on the household durables industry, published October 5th 2005, “The demand for household appliances and home furnishings is rising steadily in step with a strong housing market and the trend is likely to continue.” Franchises in this category include custom blinds and draperies, handyman services, outdoor lighting, interior design, decorative wall hangings and garage space utilization.

Basic Consumer Services
With more and more dual income households, these time starved consumers crave help with the staples of daily life. Services in demand include home cleaning services and pick-up and delivery dry cleaning.

Services for the Elderly
With an aging population, elderly care services ranging from home maintenance to personal assistance will be in high demand.

Children Activity Centers
Keeping children’s minds and bodies active away from school is big business. Franchises specializing in activities for children range from gymnastics and general fitness to art education programs.

Financial Services and Consulting
These services include income tax preparation, sales training and business coaching and development.

HR Staffing and Consulting
According to the American Staffing Association, contract and temporary staffing services had combined sales of $16.9 billion in the second quarter of 2005. The growing shortage of skilled workers is helping to fuel companies in the temporary staffing industry.

Fast Casual
This is an establishment that blends the speed and convenience of fast food with the food quality and atmosphere of a relaxed, casual dining experience. Americans continue to be hungry for restaurants that fall into this category, whether it be deli, classic American, Mexican, or Italian style, to name a few.

Howard Bassuk is the founder of FranNet, the premier network of franchise consultants who provide no-cost guidance, information and support to individuals who are interested in purchasing their own franchised business.

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About FranNet: FranNet - The Franchise Connection - is an international company that specializes in matching prospective business owners with franchise companies suited to their professional and personal talents and interests. This is accomplished by assessing an individual's requirements for their ideal business and then searching for and recommending franchise companies that meet those criteria.