Franchising has changed histrionically in recent years, and like most industries, the sector remains subject to the quirks of public taste and technological improvements. Here are some of the most significant international trends which have been pragmatic during the past year.
Area extension
Developing franchise brands in diverse geographical areas is one of the novel avenues franchise companies are trailing. Instead of enlisting many individual local franchisees, franchise companies in India and across the globe are associating with overseas developers who can steer the local ethos in those countries, and open and operate several units at the same time.
According to research experts India, more than 50% of franchises are apprehended by multiple-unit owners, and numerous of them act as area developers. Area developers have the benefit of frugality of scale and additional effectiveness in terms of operation.
Other economic factors lashing area development is the fact that financial institutions are more probably to finance franchisees with efficacious track records, and franchisors also condense their risk when they permit proven operators to unclutter stores.
Multi-unit operators
More than half of all franchise units in India are run by multi-unit operators, few with hundreds of units. These operators then manage a company which engages a staff of field and unit managers, while the emphasis on strategy and growth.
Multi-brand franchisees are also an intensifying trend. These franchises have often drenched the market in their area with their initial brand, and to endure their growth, they essentially take on a second or third brand. Others add additional brands to advance their cash flow or diversify their menace by creating a hedge against market cycles, altering consumer tastes, and swings in the economy.
Refranchising
Refranchising, in which a franchise sells its company-possessed stores to franchisees, is often seen as an emblem that a business is in anguish. But, in recent years, many high-profile global franchises have stripped themselves of corporate units, including Chicago Pizza, William John’s Pizza, etc.
The trend should not be taken as weakness, but rather as a sign of vivacity. There are certain economic incentives intricate in getting out of running company stores, and some securities analysts are far more passionate about royalty brooks than store revenue.
Acquisitions, mergers, and alliances
Acquisitions and Mergers involving franchises happen on a steady basis in India and across the world. In fact, some describe it as being at epidemic magnitudes. Huge well-known systems often acquire both individual and groups of outlets in areas where they are not embodied, to build enhanced market coverage, with the objective of franchising them in future.
The motives for these mergers and acquisitions are speckled. They can be used to cherish and protect distribution channels, expand, and to cement co-marketing prospects. Robust opportunities also exodus for shared services and efficiencies in purchasing and marketing.
Healthy fast food
Franchises are finally creating healthy fast food with eternal appeal. Fast food franchises have managed to come up with more ground-breaking products and tempting flavours, to accommodate consumers who want to take a switch of their diets. Big franchise companies want to trap health-conscious consumers who see these menu stuff as smarter picks than the traditional fast food choices.
Everchanging demographics
Franchisors and franchisees alike must acclimatize to the major changes taking place in customer demographics to find novel opportunities for growth. These include:
• Millennials: Members of this generation are coming into their own as a strong economic force as they commence their careers and raise families. They represent a massive opportunity for franchisors and franchisees, who can offer goods and services related to their mounting needs.
• Baby Boomers: As this generation ages, its members will demand many novel services such as financial and retirement planning; health and fitness programmes; child care for younger children; nutritional, cosmetic and ‘anti-aging, assistance with aging parents, and educational services for tertiary education-aged children; legal and tax services; products and services; etc.
• Seniors – People are living lengthier, more active lives nowadays, a drift that will only accelerate. This will form an ever-expanding demand for services from this prosperous, growing demographic. Healthcare-related services, accessible at home or frail care facilities, will endure growing. Other areas embrace home renovations for seniors, and health and fitness programmes personalized to ageing bodies, etc.
Growth sections
Some franchise sectors are more probably to succeed in the predictable future, than others. Contemplate these options:
• Recession-proof brands: These embrace hair styling; accounting; shipping and packaging; tax consulting; child and pet care services; home repair and renovation; computer-related services; real estate; automotive maintenance and repair; and staffing and employment services. Used goods also incline to do sound in any economy.
• ‘Green’ businesses: Energy-reduction services for both the home and the commercial sector will endure enlarging.Fitness, health, and personal care: This sector embraces fitness centres, recreation, nutrition, and sports, beauty salons and spas, as well as ‘healthy’ fast food, offers targeted prospects for each of the demographic clusters mentioned.
TECHNOLOGY
Advancements in internet and email technology have offered an added and effective novel medium for internal communication, as well as significant marketing opportunities. Further technological advancements, like automated stock management systems, global positioning systems and digital closed-circuit television systems, customer relationship management tools, offer franchised operations with prospects for enhanced efficiencies, security, and amplified revenues. However, these systems also necessitate effort and expertise for efficacious enactment throughout franchised chains.
On the other side of the coin, however, the internet has also spawned novel competitors, like internet retailers, that contest with many retail and service-based bricks and mortar operations – often with lesser overheads.
Business-to-customer e-commerce
A growing number of franchisors are also entering the e-commerce field and selling products/services to customers online because many customers now assume to buy online. By launching their own sites, franchise not only shapes their brands but also safeguard their market share.
Some franchises are also collaborating with competitors in an effort to shape crucial mass online. Other franchises are also collaborating with corresponding product/service providers to discover co-marketing and other strategic prospects.
Novel businesses
One of the most perceptible trends the internet has engendered is a novel class of franchised businesses established to furnish for a variety of new niches the internet has shaped. These include products and services intended at an ageing population. These concepts centre on financial planning, health and fitness, travel, eyewear, and a range of home services franchise.
Some franchises have gone further and added novel products and services precisely tailored to this electronic medium. A further illustration of the importance of this section is the emergence of entire novel franchise concepts geared to the internet.
Bursting bubbles
For certain franchising food trends, the saturation point may be impending. They also have little barricades to entry and there a lot of players in the market, specifically in India. For this reason, the notion is reaching a point where the ‘winners’ will be separated out from the ‘losers’ franchise.
Another franchising fad, quick serve, also seems to be close to inundation. According to observers, consumers in India don’t want to have a stretched, drawn-out meal with table service, but they don’t need a cheap environment, either. Some of the food Franchise is not inevitably cannibalising sales at fast food outlets but are rather directly contending with casual restaurant thoughts.
Conclusion:
Get going with trends is essential for franchise to survive in the market. The franchise is no exception to this. To survive and thrive one must go with the flow. At Frantastic we help our clients to flourish across the globe in various sectors.
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