Jacqui Walker

Hot franchise concepts for 2007: Pick the right trend and get ahead.

The next hot franchise concept

If you think franchising is big in Australia, consider these figures:

In the United States, franchising spans 75 different industries, provides 18 million US jobs and generates an overall economic output of $US1.53 trillion, according to a study conducted by PricewaterhouseCoopers for the International Franchise Association.

Research by FranData recently found that all US industries, with the exception of travel, are experiencing an increase in the number of franchise concepts, ranging from 4% in personnel services to 67% in retail food. New concepts are being added with increasing frequency. Over the past three years, almost 900 concepts began franchising.

US trends in franchising often signal what will happen here. Here are five hot franchise concepts from the US for 2007, according to franchise website Blue maumau.

Hot concepts in 2007

1. Coffee houses: According to the Specialty Coffee Association of America, specialty coffee was an $US11 billion industry in 2005, up from $US9.6 billion in 2004. The cafe segment of the coffee industry continues to grow.

Coffee is already big franchise business in Australia, where every second new franchise sells coffee. The market leader Gloria Jean’s Coffees, with 343 stores, turned over $183.5 million in 2005-06. BRW’s fastest growing franchise in 2005-06 was a café chain, Caffe Primo. It grew 139.06% on average each year over the past three years.

2. Staffing and business services: According to the US Bureau of Labor Statistics, staffing services will be one of the fastest-growing industries over the next five to 10 years.

Businesses that provide these services are in high demand, especially as the pool of talented workers shrinks. Other business services franchises offering everything from signage to IT will also be hot in 2007.

Australia is doing franchised labour hire, but it is in its infancy. Workforce Extensions is one of the fastest growing franchises in the country, with 56.13% annual revenue growth on average over the past three years.

3. Niche gyms: Fitness centres specialising in kids, teens, seniors and even 24 hour gyms for the all-round busybody are big. People are investing more time and money into organisations that specialise in accommodating them. These gyms focus on one group and build their facilities and services around that demographic.

There are some of these in Australia already; the most well-known is Fernwood Women’s Health Clubs, which turned over $90.3 million in 2005-06. But one chain that is younger and faster growing is Beach House Health & Fitness Centres, which offers segregated fitness training for men and women.

4. Non-medical healthcare: According to the US Census Bureau, 13% of the population will be over the age of 65 by 2010. That figure jumps to almost 20% in 2030.

There are franchises working on helping older people who want to remain in their home as long as they can. For the aging baby-boomers, in-home personal care is becoming more popular.

Services are now available that can provide not only in-home care, but also provide other home needs such as yard care, general cleaning, and all-around handy work.

This US trend is just starting to take hold here. In Brisbane, for example, there is a local chapter of US franchise Home Instead Senior Care that offers home services to older people. This would not be the sole example of these type of services, and the trend is sure to consolidate here.

5. Education and tutoring: Another concept that grows exponentially as schools become more competitive. Whether it’s online tutoring, subject-specific, or even for the youngest bunch of pre-schoolers, parents are willing to throw down big bucks to ensure their child has the extra edge.

Australian tutoring franchise Kip McGrath Education Centres and childhood performing arts franchise Helen O’Grady Children’s Drama Acadamy have been developing their models in Australia for many years and both are expanding overseas.

What do you think? If these are not the hot areas for franchising in Australia in 2007, what are they? Send your ideas to SmartCompany.


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