Q: What are market trends to consider before buying a franchise in the post-COVID-19 future?
A: Many people will be looking to maximize the potential return to "normal," as the pandemic winds down. Success requires serious consideration of many moving parts of the business landscape.
One option for potential new business owners remains franchising, and according to speaker John Francis (often called "Johnny Franchise"), there appear to be some strong near-term trends to consider.
"I see any home-oriented franchise business as highly interesting at this time," Francis said. He notes that the "nesting" behavior mandated by COVID-19 restrictions will likely hold traction for some time. "Any business that contributes to a consumer's sense of comfort in the home has potential." This includes cleaning services, building contractor and maintenance businesses, and "nesting" elements such as furniture, decorating and design, for both indoor and outdoor spaces.
Beyond the home, Francis sees the reaction to the reopening of more natural activities to translate into a strong resurgence on experiential businesses. "Anything related to travel, vacations, bar and restaurants … especially ways to enjoy being with larger groups of people again," according to Francis. "We're all ready, and a well-positioned franchise can offer benefits to both customers and owners."
Another area Francis finds interesting arose from "pivots" of businesses during the worst of the pandemic. "I saw flood- and disaster-recovery business franchisers retool to deliver deep-cleaning services for health and safety during day-to-day operations, and not just for health care businesses." He also cites the rise of support businesses like "ghost kitchens" that support food-delivery services. "Home delivery boomed, and it will probably be one of the significant carry-overs."
Finally, Francis suggests that vacancies in malls will change the landscape for retail spaces. This means some franchises can now find space physically and in the market. He believes a potential franchisee can do some proactive investigation of vacancies and seek a franchiser to pitch a location that may not have been reasonable a year ago.
Mike Porter is a faculty member in the marketing department at the University of St. Thomas Opus College of Business.