Want to spot the hottest new trends in franchising? You need to look in a pretty wonky place: the Franchise 500 categories.
Here’s why: Each year, as we create our ranking, we organize every franchise brand by category. Some categories are simple and expected, like Sports Bars/Pubs. But every year, as new kinds of franchises rise up, they require entirely new categories. For example, we’re now seeing a lot of bars where patrons can pour their own drinks — so instead of keeping them inside the Sports Bars/Pubs category, they now get their own Self-Pour Bars category.
In other words, new trends require new categories. They’re a leading indicator of where franchising is going. This year, in addition to Self-Pour Bars, we added seven other new categories. They are: Autism Treatment Services, Hawaiian Food, Hydraulic Hose Services, Mediterranean Food, Outdoor Space Construction/Remodeling, Pet Grooming, and Real Estate Investing.
Related: We Crunched 5 Years of Franchise Industry Data. Here Are 4 Big Trends You Should Know About.
What’s driving the growth in these new areas, and what can that tell you about what’s coming next in franchising? That’s what we wanted to know — so we asked! We picked four of the new categories, and reached out to a leader in each to ask: What’s driving the growth in your category? Here’s what we learned.
Image Credit: Courtesy of Success on the Spectrum
What’s driving growth in Autism Treatment Services
Why is there a rise in autism treatment services? It’s simple: There’s been a rise in autism diagnoses — but so far, there hasn’t been an equal increase in accessible care.
“There are not enough providers to meet the demand,” says Nichole Daher, founder of Success on the Spectrum, which goes by its acronym SOS. Its treatment centers use Applied Behavior Analysis (ABA), a form of therapy that helps individuals with autism improve communication skills and self-control. “Every single location has client waiting lists, whether in the city, in rural areas, or the suburbs.”
Its biggest challenge: “Staffing is the only thing that can slow an ABA business’s growth,” Daher says. Because of the individualized nature of autism therapy, an SOS franchisee needs to build a highly trained, stable, highly skilled workforce. To help its franchisees do that, the company partners with universities to offer tuition discounts and career growth options for staff. Additionally, SOS provides in-house certification and paid internships to attract and retain talent, resulting in one of the lowest turnover rates in the industry.
Image Credit: Courtesy of HomeVestors of America
What’s driving growth in Real Estate Investing
Real estate franchises have done well for decades — just look at the success of brands like RE/MAX. But now real estate investing franchises are taking off as well, largely due to the nationwide shortage of housing.
HomeVestors of America is the largest franchise in this space, and its business model is simple: Its franchisees buy homes — typically ones in need of repair or that sellers must offload quickly — and then refurbish and resell them. More than 80% of those homes are under 1,400 square feet and built before 1980, which are the kind of properties especially suited for first-time buyers — a particularly underserved market right now. “As we’ve continued to see builders scramble to accommodate first-time buyers, the houses that our franchisees are renovating have filled a critical gap,” says Larry Goodman, CEO of HomeVestors.
Economic shifts, such as rising interest rates, have impacted the real estate market. However, HomeVestors has remained resilient by focusing on median house value properties, which Goodman says has kept them “a little more insulated during the downturn versus those investors pursuing higher-priced property.”
Related: 5 Must-Do Steps to Evaluate Franchise Opportunities Like a Pro
Image Credit: Courtesy of Tapville Social
What’s driving growth in Self-Pour Bars
Want to own a bar? Consider this niche: self-pour bars, where patrons can pour their own drinks.
Self-pour systems have been in use for more than a decade. But they’ve become especially popular now. “As wages and labor expenses increase, self-pour systems offer a cost-effective alternative to traditional staffing,” says Michael Venditto, COO of Tapville Social, a leading franchise in the space. Tech innovation has also driven growth. Self-pour technology uses RFID-enabled taps and real-time consumption tracking to provide previously unmatched efficiency for both operators and guests — along with great data. “They provide insights for inventory management and enable personalized marketing through loyalty programs and mobile apps,” Venditto says.
Plus, consumers just like the experience. “It’s an interactive experience that encourages group participation,” he says. “Friends, family, and coworkers enjoy sampling beverages together.”
Image Credit: Courtesy of PIRTEK USA
What’s driving growth in Hydraulic Hose Services
When a company needs heavy machinery, it often starts with a fundamental question: Should the machine be hydraulic or electric? Many industries, such as construction, agriculture, and manufacturing, continue to favor hydraulic — so as these industries have grown, the need for hydraulic hose services has grown too. “Hydraulic systems are more efficient, less costly, and more predictable, while remaining clean, sealed systems,” says John Dobelbower, vice president of development at PIRTEK USA, one of the leading franchises in the hose services space.
The services industry has formed around its clients’ needs. For example: “They’re often operating under tight timelines,” Dobelbower says. That’s why PIRTEK offers 24/7/365 mobile services for immediate hose replacements. Customer expectations are also evolving, with a focus on minimizing downtime and maximizing efficiency — so PIRTEK also offers maintenance and inventory management solutions, to prevent problems before they start.
Related: Exploring a Franchise Opportunity? 5 Key Questions to Ask.
