It is difficult to make accurate predictions for 2023 franchising. It depends on various economic conditions, consumer trends, and technological advancements. However, a few predictions may shape this industry in the coming year. Here are some trends for 2023:
Increased use of technology
With the current labor market shortages, franchises will likely continue adopting new technologies to streamline operations and improve the customer experience. This may include the use of online ordering systems, greater use of mobile apps, and social media marketing.
Growth in Do-It-For-Me Concepts
The "Do It For Me" (DIFM) movement is essentially the exact opposite of the Do-It-Yourself (DIY) economy. It refers to a trend where people are more likely to seek services where work is done for them rather than doing the work themselves. This trend is often attributed to the increase in time-saving technology and the busy lifestyles that many people lead. Franchises are also a perfect fit for the DIFM generation. This is because it offers a turnkey business model that allows franchisees to follow a proven system and receive support from the franchisor.
Continued Shift to Service-based franchising
This is an extension of the DIFM movement. Many people are looking for businesses that offer a service rather than a tangible product. This has led to a rise in service-based franchising, such as home improvement, home maintenance, pest control, and cleaning services. A benefit of the service-based business is that they often enable franchise owners the ability to run their businesses remotely, and semi-passively
Individuals are looking to meet lifestyle goals such as bringing greater balance in one's life. Along with the motivation of Covid-19 and the increase in internet access and speeds with advances in technology and software, more franchisors are offering virtual franchise opportunities. These opportunities allow franchisees to run their businesses remotely, working as few as 10-20 hours per week.
Expansion of Investor Franchisees
Investors are looking to diversify their portfolios with continued inflationary and recessionary pressures. There is a growing interest among investors who want to fund their own companies to build future equity value. But they want to minimize their time investment to a few hours a month. Expect a continuing trend towards fully-managed franchise models where investors put up the cash for their own company, and the franchisor operates the business for the investor.
There is a growing demand for sustainable and environmentally friendly businesses, and this trend is also reflected in the franchising world. Some examples of eco-friendly franchises include green cleaning and recycling businesses.
Health, Wellness, and Fitness Franchises
As people continue to be more health-conscious, there has been an increase in franchises focusing on health and wellness, along with fitness centers and healthy food options.
Continued Growth of the Food Industry
The food industry, including fast food and casual dining, is expected to continue growing in the coming years as we move farther away from mandated closures from Covid-19.
Pop-up Franchise Options
Expect a trend in pop-up stores and kiosks that have become popular in recent years. Some franchisors are considering pop-up franchise opportunities as new streams of revenue. These franchises allow franchisees to set up smaller or temporary locations to test the market before committing to a permanent location.
These are just a few predictions for 2023 in franchising. Do you agree with these predictions?
Only time will tell how well these trends for 2023 pan out when we return next year to assess our predictions.