Top 10 Signs of a Great Franchise Opportunity: #1/Industry Growth
What makes a great franchise opportunity? AllBusiness.com posted an article recently about the 10 signs you should look for when thinking about buying a franchise—whether it’s a haircare salon or something else (although I really can’t understand why you’d consider anything else!).
The first one on the list is industry growth. Before you start any business, you’ll want to know if there is growth potential in the industry you’re considering. Here are some questions I think are important to consider (and then I’ve related that question to the Great Clips category of walk-in salons):
n Is this a product or service that people are going to want more of in the future?
Haircare is a $55 billion industry and getting bigger every year because almost everyone needs a haircut. Customers realize the advantage of a walk-in salon for ease in scheduling and good value. And I believe that’s not going to change anytime soon.
n Is it a market category that is recession proof, or even better, will grow in both good times and bad?
Regardless of the economic situation, people still get haircuts. In fact, according to the U.S. Bureau of Labor Statistics, cosmetology is ranked as the most recession proof industry a business owner can pursue.
n Is it an industry that has a built-in demand, offering a product or service that brings customers back to the business regularly?
Most people get their haircut every four to six weeks, which creates a reliable return-customer base for hair salons.
n Is it a profession that people like to go into so that as your business grows, you will have a readily available work force?
Employment of people working in the personal-appearance profession—barbers, cosmetologists and stylists—is projected to grow faster than average through 2016. This kind of opportunity will attract more people to this profession, which is good news for salon owners looking to hire the best in the business.
n Is it a product or service that can’t be replaced by technology or done by someone overseas?
Hair care salons aren’t a fad and the work can’t be done online, overseas or with new technology. Unless, of course, you find someone with a Flowbee.
n Is it a business that will attract your local population and hasn’t already saturated your area?
Great Clips balances our locations between emerging markets, growth markets and mature markets to make sure that we have the right number of salons that we can fully support.
Of course, you should always do your own research when you’re considering a franchise and there are several places to find out about market potential of almost any industry. Here are just a few:
What industry intrigues you? What do you think the “next big thing” will be?
My next post in this series will be about Unit Growth, something I’m really passionate about because I believe it’s a key indicator of the strength of both an industry and a specific brand. More to come!
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