The fallout from the COVID-19 pandemic should have put fear in those looking to start their own business as they watched companies close and profits drop. Instead, it became a catalyst for the ambitious ready to take their next big adventure.
During the Great Resignation of 2021, employees began reprioritizing what was important to them professionally and quit their jobs at a record rate. By September, Americans filed more than 1.4 million applications for new businesses, including the thousands of budding entrepreneurs who became first-time franchise owners.
As we head into 2022, the trajectory of new franchises is expected to continue at a record pace. With that growth comes a number of trends today’s franchisees need to keep an eye on to take advantage of exciting new opportunities over the next year.
- Growth categories that reflect our new normal – During the pandemic, when most Americans were cooped up at home, popular franchises included tutoring, cleaning and restoration, and home improvement. As COVID-19 restrictions continue to lift and people want to get out and about, there’s a higher demand for salon and spa services, gyms and wellness, and children’s enrichment activities.
- Being smart about staffing – The professional burnout that motivated employees to become entrepreneurs can impact the team members they eventually hire for their new business. In fact, 46 percent of business owners were unable to fill open positions at some point this past year. Investing in the attraction and retention of talent is more important than ever before – according to the International Franchise Association, those franchisees who create a culture of teamwork, recognize good work, and incentivize success will outplay their competitors. In addition, companies that offer flexible and work-from-home options take the lead in today’s gig economy.
- A changing view of dining out – While Americans may be in a rush to return to in-person dining, they still want the option of off-premise eating that became the norm during the pandemic. For potential restaurant owners who want to ease into the industry, this offers a lower cost of entry. As Restaurant Dive reported, “Franchisors have pivoted their store designs to smaller units with little or no dining space, making multi-unit deals more affordable for small and mid-sized franchisees.” These new concepts are easier to operate, requiring fewer employees and a smaller menu.
- The renter’s advantage – When it comes to customer-facing franchises, location is everything – and until recently, a premium location came at a premium price. However, as companies consolidate offices, employees continue to work from home, and online shopping and services replace in-person, the demand for space has declined. Developers and landlords are eager to fill vacancies, which gives franchisees the upper hand in negotiations. The best time to get in is now before rent prices start to rebound in 2022.
- Supply chain issues and the ability to adapt – Small businesses have been significantly impacted by supply chain issues, which aren’t likely to subside in 2022. This year, 45 percent of small businesses have experienced domestic supplier delays. Franchisees must have the ability and creativity to adapt to the unexpected at a moment’s notice to keep customers happy. In a recent panel discussion hosted by Fast Casual, restaurant executives said business owners can stand up to the challenge by building relationships with vendors and banding with other franchisees to increase buying power.
If your goal for 2022 is to finally take the leap and start your own business, becoming a franchisee is the perfect place to start! FranSelect can connect you to franchises that align with your interests and budget, explain the challenges and opportunities around the corner, and help you gain perspective on your finances and cash flow. Set up your free consultation with a Franselect Franchise Advisor today.
