The franchise industry has been on a roller coaster ride over the last few years. When the COVID-19 pandemic hit, franchise owners had to quickly pivot to align with changing consumer buying behavior, fluctuating opening/closing policies, new safety measures, and more.
While 2020 saw major dips in the economy and many location closures throughout several industries, 2021 picked up the pieces, and the franchise industry began running on revised practices that are continuing into 2022. Although we are not necessarily in “post-pandemic” times just yet, there are some promising outlooks for the franchise industry as we move forward.
Changes to franchise brands not only mean updates to business operations, but other important factors like employee satisfaction, work culture, and the products or services that customers want. With this in mind, here are four popular predictions for the franchise industry in 2022.
1. Multi-service businesses will prosper
One of the best ways to forecast industry changes is to establish what grew in popularity the previous year. While businesses that offer multiple services have always been appealing to consumers, 2021 helped to solidify this, particularly businesses that offer reoccurring services. Diversifying offerings within a franchise business is a great way to increase revenue and generate interest from current and prospective customers.
Not only does diversifying allow a business to offer more to customers, but it can also help a franchise stand out from the competition. If customers can conveniently receive multiple services at once from a business, it can increase their customer lifetime value, especially if they will likely need to use those services again in the future. Pursuing franchises with diverse revenue streams can also help increase financial stability for a franchisee, as it can help reach more customers with diverse needs.
2. An increase in wellness-based franchises
Usually at the start of each year, health and wellness become common themes among resolutions. And while this remains true in 2022, many individuals have already been prioritizing their health more than ever, largely because it has been front of mind during the pandemic.
Already, services in this sector are growing at exponential rates. The global Medical Spa market is set to grow by $31.5 billion by 2025. Meanwhile, gym, health and fitness clubs have already increased 1.5% this year from 2021, with a total of 106,132 fitness clubs now in the US.
With recent reports stating that the global wellness market will grow to a $1.5 trillion industry, in accordance with an annual growth of 5-10%, it is showing no signs of slowing down, especially since consumers have different perspectives on what “wellness” means for them. Whether it means better overall fitness, nutrition, mindfulness, or appearance, there are many options to enter this growing industry.
As well, wellness doesn’t just stop at humans – our furry four-legged friends are included! The pet industry saw a boom in 2021, as it is currently over the $100 billion mark and is projected to nearly triple by 2030 to $275 billion. Since many people adopted pets during the pandemic, more and more pet parents are looking to spend on their furry family members at much higher rates.
3. Changes to workplaces
As with any workplace, employees play a very significant role in carrying the established brand message and effectively keeping the business running. Working as a team is one of the great things about running a franchise, but during the pandemic, the workplace environment may have been altered, and these changes will have lasting effects.
For example, remote work has swept the nation, and while working remotely is not always possible for franchises that rely on providing services through a brick-and-mortar location, franchise owners and their employees may be more likely to engage in remote work for meetings, updates, training, etc.
As well, many workplaces will continue to enforce new technology and safety measures that were adopted because of the pandemic. These modifications that almost all franchise businesses have had to adapt to in some way will likely become the new “norm” as customer expectations have changed. For example, curbside pickup allowed many businesses to accommodate orders throughout the pandemic. With a 208% usage increase in 2020, curbside pickup has provided customers with an element of convenience that they now expect in their shopping experience. Although it was largely implemented as a pandemic response, “buy online, pick up in-store” (BOPIS) strategies are likely here to stay.
The workplace is not only changing in technical aspects; it is also important to recognize how it is changing for employees as well. Beyond new safety measures that may have transformed the way employees carry out their day-to-day responsibilities, other considerations have been brought to forefront because of the pandemic. For example, employee mental health is a topic that is increasingly important, mainly because of the great deal of stress the pandemic has caused, leading many to re-evaluate their workplace satisfaction. In 2022, expect franchisors to increase their investment in mental health strategies, such as more employee check-ins or greater access to mental health resources.
4. Increased rate of franchise owners
Many individuals continue to face job insecurity, making the franchise industry an attractive option. 2021 demonstrated how resilient franchising is, with the industry having almost recovered to pre-pandemic levels in nearly all metrics, including business growth, employment, economic outlook, and contribution to the GDP.
Not only do franchises offer the stability of a proven business model, but the freedom of becoming a franchise owner makes it an extremely appealing option for those who want to step away from traditional jobs. Franchisors offer support through each step of the ownership process, while affording the security that many are now seeking. As well, 2022 offers greater real estate opportunities than previous years, which grants more options to more individuals.
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If franchising is in your 2022 plans and you are interested in learning more about Dogtopia, be sure to check out our online FAQ page for more information.