The Hot Business VS The Right Business?
So what is the new hot franchise?
This is a question I’m often asked by people in the early stages of their research process. I guess the reason it’s asked so frequently is human nature. When we see a popular trend, it triggers an emotional response… and we want to be a part of it.
Unfortunately there are significant flaws in approaching franchise ownership this way. While I think it’s important to understand the trends in the industry, as this can help one better understand the market. That being said, just because something is “hot” or “trendy” doesn’t mean it’s the best option, particularly for a first time franchise owner. In fact, this approach can likely lead to a costly mistake…
Here are a few reasons why…
What is “hot” can quickly become “cold”.
This doesn’t necessarily mean all new and trendy franchise models won’t be successful. Even the largest franchise systems in the world today started with a single unit. While the hot franchise model might be a good choice, it’s my opinion a first time buyer is better-suited targeting industries/models that are sustainable and have a track record of success through both good and bad economic cycles. While there is no such thing as “recession proof”, there are business models that are more resistant to an economic down cycle than others.
The second and perhaps more important thing to consider is how the franchise fits your skills, lifestyle and financial requirements. You see… it’s not what the business is but what the business gets you.
Therein lies the essence of effective franchise research. There are many successful franchise brands various industries. The key to their success is not just the business model, but finding owners that have both the “passion” for the business as well as the “skills” necessary to make that business successful.
If the business doesn’t fit your objectives, or, even worse, doesn’t provide fulfillment, you’re not going to be happy. If you’re not happy, the statistical probability of success is diminished and your lifestyle will suffer.
If you’re thinking about franchise ownership, try to avoid focusing on what’s hot. While the emotional need to participate in a new and exciting trend might seem compelling, it can come with higher risks not suitable for a first time buyer. My suggestion would be to target models that have both a proven track record that fit your skills, passions and interests. Taking this approach will likely lead to a higher probability of success.