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Trends

Deciphering What's Hot in Franchising From the Hype in 2006

For those searching for the hot franchise concept (like me) who are busy, you will find this of interest. In bullet point below are hot concepts from an Entrepreneur article on what’s hot and why. It leads off on how hot franchise buying has been last year -- “the total number of franchise units for all Franchise 500 companies grew 11 percent from 2004 to 2005. That's an impressive jump compared to the 4 percent increase that occurred from 2003 to 2004, not to mention the previous year's drop in franchise units.” I had also heard similar statistics through the grapevine from leaders of the IFA.

Technology Trends: Blackberry fast food finder

Here's news on breaking technology to help consumers find the nearest quick-service restaurant from our friends at Fast Food News. A new Blackberry application called Fast Food Finder will find the closest fast food chain. One Blackberry blog wrote they were able to "query for any of 33,000 fast food locations and get a map, address, and directions." There is also a locator software called "caffeine finder" that helps customers find the closest coffee house for their daily caffeine fix.

Every little bit of marketing, particularly when it is free, helps. So, my next question is how do I make sure that my store is registered so that my customers are finding me? I had to call the company to find out the answer. The company that provides this service, Greystripe, said that if your shop is not on the listing and you want to be on it, send an email with the brand name, location and phone number to fastfood@greystripe.com.

 

Twin trends of fat and fitness

"There are always opportunities through which businessmen can profit handsomely if they will only recognize and seize them." - J. Paul Getty

The past week, it seems even more popular with the media to focus on poor diets of American children and the easy availability of sugar and fatty foods in super-size portions. One recent news was of a study that found that food marketing strongly influences children's poor diets, Specifically, "Food and beverage marketing targeted to children ages 12 and under leads them to request and consume high-calorie, low-nutrient products," says a new report from the Institute of Medicine of the National Academies. Quick service restaurants and soda firms are feeling the pressure from such stories.

New Media for a Franchise -- The Blogosphere

I overheard a fascinating radio discussion from journalist, author and venture capitalist Dan Burstein (audio streaming available online), who was plugging his new book on National Public Radio. Consider this:

“Blogging is making the world a much smaller and bigger place all at once.”

Pet Franchises, Bow Wow Wow WOW!!

“A boy can learn a lot from a dog: obedience, loyalty, and the importance of turning around three times before lying down.” -- Robert Benchley
 

I love my dog and I certainly do pamper it. The busier I get the more I seem to pamper her when I am home. And apparently, there are more and more people like me who downright pamper their dog. I mean, our dogs can even sleep in bed with us. Sociologists can comment about why we continue to take to our pets the way we do but what is of interest is how many out there are just like me. The business fundamentals of a booming pet franchise industry sounds like money to me.

The Upcoming Boomer Boom

Baby boomers about to retireThe first wave of America's 78 million baby boomers is barely 60 days away from hitting the big six-oh. In a little over three years, they'll be over 63 and retiring (see video). The greying of America means more retirees and a shrinking work force. Industry analysts say large-cap pharmaceuticals, hotel-resort chains and home builders have a chance to be big winners in the next five years. According to Forbes, this is what the shift in demographics mean:

Fast-food Restaurants Going Small

Two of the biggest burger chains -- Wendy's and Burger King -- are developing restaurants with smaller kitchens and seating areas , costing less to build and fitting into cheaper parcels of land. Popeye's is looking to follow suit, and even Applebee's, a sit-down restaurant, is looking to reduce square footage in rural area restaurants.

Burger King discovered in a study that the seating areas of their restaurants were way too large. For a franchise, that means one has to pay for more land and more layout space that has no additional revenue. That's bad. It means a longer return on investment because non-producing space drags returns down. Smaller, better utilized restaurants means return on investment for franchise owners go up.

Treasure Map of Franchise Opportunities 2030

Despite any short-term dips in real estate or franchising, the business climate for the long-term is about to pick up steam. America's infrastructure will need to grow by 200 billion square feet to accommodate 70 million more people in the next 25 years. To give a feel for the scale of this, it took 300 years to build our current 300 billion square feet. In other words, there's going to be a lot of development cropping up. So says Business 2.0 magazine. Some large mega-cities have an edge, providing franchise opportunities that will be particularly strong because of strong demographic shifts. The most relevant opportunities in franchising are bulleted below.

Aging Population Wants Fountain of Youth

I've been thinking of what sort of franchise takes advantage of long-term market trends. One can't think of the market without acknowledging that one of the biggest changes in demographics is an aging population. And, the new elderly, the baby boomers who are now beginning to retire in large numbers, are a senior population that wants to continue to look and feel young.

Almost a decade ago, one U.S. demographer said, "If you want to sell things and go where the growth is, about half of your market will be people in their 50s..." In the same report, it states that the "high growth" group is people over age 55. This group is growing at a forty percent growth rate from 1990 to 2000. The baby boom generation is getting older."

Why Can't My Franchisor Innovate Better Returns?

Having system standards rated close to 100%, here I am, a model operation of the franchise network. Doing so was supposed to raise my return on investment, but honestly, it's still low. My money would do better in a bank CD than the returns I get from all the hard sweat that I put into my store. There. I said it. So why should I expand to a second store just because it can be cash positive? Who wants to invest $1.5 million to get $50,000 a year in cash after the bills are paid? I need help from my franchisor in rethinking efficiencies and greater revenue per cost center. With this in mind, here is an interesting story coming down the pipe that I hope my own franchisor will take to heart in rethinking the map on getting better returns for the franchisee.