Trending Industries Choosing to Grow Through Franchising

Some of the hottest industries are choosing franchising as their preferred growth strategy. From health and wellness to pet care to residential services, these sectors are seeing incredible consumer demand, and franchising is playing a huge role in helping these brands scale nationally. Join us as we break down the industries leading the charge.

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Transcript

Mark Vandegrift 
Welcome to the latest episode of FranSimple, the podcast designed to make the concepts of franchising simple. I'm your host, Mark Vandegrift, and with me is the president of FranSource, an all-time franchising expert, and just an all-around great guy, Steve Vandegrift. Steve, how you doing?

Steve Vandegrift 
I'm doing great, Mark.

Mark Vandegrift 
Awesome. Okay. Well, to get us started, we have kind of an interesting topic today. We know the economy is, depending on who you talk to, is going great or maybe not so great. But the one thing that's true is that there are a lot of companies that are choosing franchising right now instead of expanding corporately. And so why don't you give us a little bit of a sense of why that is?

Steve Vandegrift
Well, first of all, I believe it really comes down to scalability and speed of execution. I mean, franchising allows brands to grow with motivated local operators instead of relying entirely on corporate expansion, which obviously requires much more capital and infrastructure. This is especially true, I think, in service industries, where local ownership really does create stronger customer relationships. It also allows brands to grow and expand into new markets much faster while they're still maintaining operational consistency, which is so vital. I'd like to refer to this as boots on the ground franchises, where having a local owner that can create strong customer relationships is so important to the overall success of the brand.

Mark Vandegrift 
Interesting. Well, you know, one of the industries that that we've done a little bit in and we actually have a new concept that we're working on right now is the health industry. And if you combine that to health and wellness, that's kind of exploded over the last several years. What do you think is driving just that one particular industry's growth?

Steve Vandegrift 
I think it comes down to the fact that consumers they're just much more proactive about their health and their overall well being. And health and wellness have become such a major part of many people's lifestyles instead of something that they only focus occasionally on.

Mark Vandegrift 
Why do you think it works really well for health and wellness then?

Steve Vandegrift 
Well, first of all, they're very system oriented, and that's so important, which makes them highly replicable. Whether it's membership billing systems, scheduling platforms, consistent treatment protocols, customer experience standards, franchising allows brands to duplicate successful operating models across multiple locations and areas.

Mark Vandegrift 
Well, you know, there's different types of health and wellness. We're kind of in a I would call a pretty niche area that we're working on right now, but l just take it broadly, what types of concepts are getting the most momentum in that industry right now?

Steve Vandegrift 
Well, we're seeing increased demand and strong growth in boutique fitness, med spas, recovery studios, IV hydration, hormone replacement therapy, and holistic wellness concepts. Consumers are willing to spend much more on services that improve their quality of life and their longevity.

Mark Vandegrift 
Hmm, okay. Well, if I were someone considering a wellness franchise, which I would have to get in shape first before I did that, at least physically, maybe not mentally, I'm there. What makes this particular category attractive from an ownership standpoint?

Steve Vandegrift 
Well, a major advantage is certainly recurring revenue. Many wellness concepts they operate on membership models or repeat appointments, which creates much more predictable cash flows, so very attractive.

Mark Vandegrift 
Good. Okay. Well, let's jump over to another category. And I can tell you that we've seen it firsthand in our in our own agency as the what we call pupsociates seems to grow every day. That's the pet care industry, and it's just booming when it comes to franchising. It almost seems like recession resistant at this point, right? We saw COVID, all it did was go boom through the roof.

Steve Vandegrift 
Yes.

Mark Vandegrift 
And every time we have kind of a downturn in the economy, it seems like people go out and their comfort is getting an animal. So why is the pet industry becoming such a strong franchise category?

Steve Vandegrift 
Well, people increasingly are viewing pets as literally family members. So that emotional connection that drives consistent spending on grooming, daycare, boarding, nutrition, and wellness services. Even during economic uncertainty and certainly downturns, pet owners continue to s prioritize their pets and they're willing to spend.

Mark Vandegrift 
Well, think about it from the from as a good fit for franchising specifically. What why is pet care such a fit? We saw health and wellness aligns really well because of the membership type orientation. Obviously, pet care is booming, but as far as franchising and franchising systems, why is it a good fit?

Steve Vandegrift 
Well pet care businesses rely heavily on repeat customers and certainly customer trust. Franchising provides brand consistency, operational systems, and creates ultimately consumer confidence. It also helps independent businesses scale into recognizable regional and national franchise brands.

Mark Vandegrift 
Cool. What segments are growing faster than others in the pet care arena?

Steve Vandegrift 
Well, you have mobile grooming, doggy daycare, boarding, pet wellness, premium pet services, they're all growing rapidly. And again, pet owners are spending more on convenience and premium experiences for their pets than they have certainly in the past.

Mark Vandegrift 
Well, what should potential franchisees understand before they get into the pet care industry? Is there a I mean, other than you better like working with animals, but what other things might you consider?

Steve Vandegrift 
Well, it's important to realize it's still a a service business that's built around customer relationships. People are literally trusting you with a member of their family. So franchisees who genuinely enjoy customer interaction and engagement, community involvement, they tend to perform very well in this category.

Mark Vandegrift 
Okay. Well, you know, if you're out there and you're shopping for a pet and you want to get into business for yourself, you can rest assured it's a look into franchising because there's a lot of pet care franchises out there right now.

Steve Vandegrift 
There certainly are.

Mark Vandegrift
Let's shift over to yeah, let's shift over to another one, residential services. And why don't we define that first? So define a residential service first.

Steve Vandegrift
Well, HVAC, plumbing, roofing, restoration, cleaning, handyman services are a few examples.

Mark Vandegrift 
Okay. So that's quietly become one of the strongest franchise sectors. And you would think, you know, there's so much competition. I have twenty plumbers around here. How is a franchise gonna work? But give us a little background as to why residential services that vertical is seeing so much franchise growth right now.

Steve Vandegrift 
Well, homeowners are continuing to invest heavily in their homes, especially with aging housing, inventory or lack of inventory, I should say, deferred maintenance needs and higher interest rates. And so they're gonna invest in that existing home rather than look to purchase a new home.

Mark Vandegrift 
Okay. And what advantage is there in you know, if I can start up my own plumbing business, what do I need a system for? What's the advantage in home service businesses?

Steve Vandegrift 
Well, franchising really does provide more robust systems. They have branding, they have technology, marketing support, operational training that honestly in independent businesses often lack. And consumers also trust recognizable brands when they're hiring someone to work inside or outside their home. It's so critical.

Mark Vandegrift
Yeah, that's we love the branding side of it. Residential services are kind of attractive because many concepts don't require traditional retail space, correct?

Steve Vandegrift
That is, that's exactly right. Many, many home service franchises can operate with lower overhead simply because they're mobile based businesses, which creates opportunities for entrepreneurs who want scalable operations without the large cost associated with storefronts.

Mark Vandegrift 
Okay. So what do you think not to denigrate a certain category, but a lot of times the personalities, the interactions, things like that aren't always necessarily there. What personality traits or skill sets make someone successful in residential service franchising?

Steve Vandegrift 
Well, I would certainly say strong leadership, being customer oriented and having team building and management skills are huge. Many franchisees in this system, they don't necessarily come from technical backgrounds because they don't have to. The franchisor provides the system, the training, the support, and the franchisees, they simply plug and play, as we like to say.

Mark Vandegrift 
Okay. Very interesting. Are there any other industries that come to mind that are just kind of going nuts? I mean, we're always in the restaurant industry, the food industry, but can you think of any others that have kind of been a surprise to you at all?

Steve Vandegrift 
Well, I wouldn't say surprising, but child education and child care services are also booming. In fact this sector is currently growing three percent nationally because the services meet what we call essential recurring needs.

Mark Vandegrift 
Mm. Okay. I think we're seeing a lot too in medical services. We're gonna be talking to a client on the marketing side that's interested in franchising here soon that's into medical transportation. Are you seeing that the medical industry is go going, you know, a little bit higher with the franchising concepts?

Steve Vandegrift 
It's also growing, yes. Maybe not at the scale of some of these other industries, but there's always the need and there's more and more systems, franchise systems that are being developed within the medical industry as well. We've worked with many over the years.

Mark Vandegrift 
Okay. Well, put the three industries we talked about together. So health and wellness, pet care, residential services. You can mix in a few others if you want. What is the common thread right now that's making them so franchise friendly?

Steve Vandegrift 
They all involve recurring customer relationships, scalable systems, and strong consumer demand. These businesses are built around trust and consistency, which aligns perfectly with the franchise model.

Mark Vandegrift 
Are you seeing that there's it the connection with the franchise and the personality of passion? So if I'm really into pets, you're finding a lot of people are searching that, or if I'm really into health and wellness, is there an alignment that way, or do you see it as just business minded individuals chasing after an industry that's hot? In other words, chasing the trend versus chasing the passion.

Steve Vandegrift
It's a it's a little bit of both. I mean, ultimately they're looking for good investment opportunities. I do believe having a passion for the business, the brand, that you're going to be a franchisee in is very, very important. But sometimes people just make a decision simply based on the unit economics is the simplest way to explain it.

Mark Vandegrift 
Yeah, we've talked about our golf franchise several times and the franchisees there come in and they're hardcore golfers. They love they want to be in an industry they love, so it makes sense.

Steve Vandegrift 
That's right.

Mark Vandegrift
Yep. I mentioned medical, we talked about medical transportation, we talked to a couple others. Are there any other industries that are experiencing substantial growth right now in franchising?

Steve Vandegrift 
Well, as I previously mentioned, child education and child care services are also booming and that's not gonna end. We invest a lot nowadays in our kids, our grandkids, and that obviously is not gonna go away anytime soon.

Mark Vandegrift 
Yeah, that's for sure. We've had those around for a long time. You've done quite a few of those in terms of setting those up. Is there a particular angle that you're seeing right now in education that is intriguing to you in terms of, you know, is it personal tutoring? Is it a certain system that's being used? Any, I guess, particular trends you're seeing?

Steve Vandegrift 
Well, it's all over the board. I mean, again, overall, today's generations and each progressive generation is spending more and more on their kids. And so there's so many different sectors within that child education, child care services. And by and large, they're all doing extremely well. And there's new franchisors coming into this industry as well.

Mark Vandegrift 
Gotcha. Okay. Well, for listeners that are exploring franchise ownership opportunities right now, what advice would you give them based on selecting a vertical that they might be go into?

Steve Vandegrift 
Well, and you kinda brought this up. You know, I would certainly encourage them to focus not only on trending industries, but also on their personal strengths, their lifestyle goals and their passion. You know, I really believe that the best franchise is one that matches both market opportunities and the franchisees' strengths, their passion and their goals.

Mark Vandegrift 
Yeah, that's good advice. It's interesting because I guess I look at it from finding differentiated, you know, that's my mindset being America's number one positioning ad agency. I'm always looking for differentiated concepts and what I think will stand out in the marketplace. But you certainly have to marry that with your passion because otherwise, you know, you're going into work every day. Do you really want to be doing that thing that you're not passionate about?

Steve Vandegrift 
That's right. That's exactly right.

Mark Vandegrift 
Yep. Good. So you know, you're gathering details from these different industries. If you were to give franchisees that are looking for a concept a place to go to look for what's trending, what's hot, all of that. I mean, obviously we have AI and you can do a search on that, but in my mind, that's not always real overly reliable. What are some of your go to sources for this type of information?

Steve Vandegrift 
Well, to your point, nowadays you can search. Yes, AI is not always accurate. But you have a lot of industry publications as well, and just in general news, franchising's in the news a lot. You know, keep your ears or your eyes open. If you're searching for a particular industry, you can certainly find a number of articles in terms of the growth. And so nowadays, as I've like to say, for the last 30 years, we've had this great thing called the internet, which makes researching franchises so much simpler. Yes, you have to, you know, kind of validate what you're seeing, but again, you know, you have the IFA annual business report or the growth in franchising. And so those types of things identify those sectors that are growing, etc. You offset that with other research that you've done, and then you examine yourself personally. You know, will I have a passion for the brand? Do I have the right strengths for this brand? And most franchisors will help you figure out whether you're a good fit or not. They want operators that obviously fit their brand. And I think that franchisees should take the same approach. Does this brand fit me, my personality, my makeup. That's really vitally important.

Mark Vandegrift 
Yeah, and I would guess that they probably make trend predictions like in five years this will be the hottest franchise category. And then and yet we know minor things like pandemics can change all of that. Yep.

Steve Vandegrift 
In a heartbeat. That's exactly right. And that's the other thing to look at in a business. Does it have long term growth potential? If I'm a franchisee, I certainly want to think about maybe opening a second, a third location. And so you do need to examine what does the future hold as best as we can see. What does it hold for this particular industry or brand?

Mark Vandegrift 
Yeah, and sometimes if you're on the tail end of that curve, you're taking a little risk because now the trend has been caught on by others. And it seems like you open one concept and there's five others that open right after you or just right before you. And it's like buying that car in the lot you think you've never seen before. You pull off the lot and you see ten of them drive by.

Steve Vandegrift 
That's right.

Mark Vandegrift 
Is there a way to capture the beginning of a trend when it comes to a vertical or do have to kinda is that like playing the stock market and there's no sure way to look at it?

Steve Vandegrift 
Well, again, doing research you can certainly see what's trending, so to speak. But I think specifically of non medical senior care. You know, ten, fifteen years ago there was an opportunity there, and over the last ten or fifteen years we've gone from fifty franchise companies to a hundred and fifty, it seems like. And so to your point, that's an industry that you really have to think long and hard about in terms of making an investment for your specific market. You know, if there's fifty-two competitors out there what is gonna differentiate you in that marketplace.

Mark Vandegrift 
Yeah, and as we would always from the of course the marketing side, the branding side, we're always gonna lay heavily into, you know, do you feel like you can put that brand on every day, wear that brand, does that brand have a substantive force to it? You know, is it a national level brand that you're not walking into, well, mom and dad, local yokel decided to franchise, they have two locations, their logo's not great, their branding's not great, versus running into a company where, you know, it's full force, they have really good branding behind them. That's where I lean, which is, you know, make sure you're considering that. You may not be a branding expert, but maybe put up  multiple brands in one category and go which one of these do I would I walk into without knowing anything about it? 

Steve Vandegrift 
That's it. Yes.

Mark Vandegrift 
So I guess that's my recommendation for today is for the franchisors that are out there, you have to get your branding in order. But for franchisees, you know, don't forget to do a deep dive in that area because there's a lot of companies, they don't have their marketing act together. They don't they don't have a national level brand. And while you might be getting in on the ground floor and there might be some deals to be had.
The longevity of your business is directly related to the success of that franchising concept.

Steve Vandegrift 
There's no question about that.

Mark Vandegrift 
Yeah. Well, great insights today, Steve it's clear that, you know, these different verticals we talked about are doing great. And we'll add child education and child care services in there, medical, a couple others. And there are industries where franchising is just creating tremendous opportunity for both brands and would-be entrepreneurs. Let's go ahead and wrap up today's episode of FranSimple. Thank you, Steve, for joining us. Thank you to our listeners for joining us as well. And we hope you'll stay with us and make sure you like, share, subscribe to FranSimple, the podcast designed to make the concept of franchising simple. Until next episode, may your business expand through the power of franchising.