5 Best Franchise Opportunities for 2013
NEW YORK ( TheStreet) -- Interested in running a franchise? Consider starting a hair salon, becoming a business coach or opening a gym if you're looking to get the best bang for your buck.
Franchisees are always looking for the next "big thing." Yet, following consumer trends is one of the best ways to keep tabs on the services and products that could do well as business investments.
"Particularly because of this economic downturn ... more people are looking to take control of their own destiny," says Brian Miller, president of The Entrepreneur's Source . "Industry sectors that are growing is certainly something that franchise candidates are interested in" for long-term success.
Miller's firm helps franchise candidates understand potential opportunities within specific industries. The company works with more than 200 franchise brands, but it represents the candidates, not the franchisors.
While turmoil in Washington and a sluggish economy mean franchise establishment will be moderate this year, there are a few sectors that stand out, according to the International Franchise Association's 2013 business outlook.
Experts say businesses driven by catering to specific demographics (such as baby boomers), health and wellness, personal services (hair care or auto servicing), and service-based businesses will continue to thrive.
Here are five strong franchise industries for 2013.
1. Hair Care
Hair care is just one industry in the booming personal services sector. The number of franchise establishments in personal services is expected to grow by 1.5% this year, according to the IFA's 2013 forecast, making it the fifth fastest-growing sector (tied with lodging) among the 10 that the association tracks.
Hair salons are a particularly good bet because while consumers might decide to skip the lavish vacations or fancy meals, they always need a haircut.
"People will always need their hair cut and, especially in a shaky economy, they're looking for a quality, convenient cut at an affordable price," she says. Consumers are also busy. They want to be able to get in and out of a salon with little wait times. Great Clips' online check-in service alleviates that issue, she says.
On the business side, the franchises are profitable and conducive to multi-unit ownership.
"Most of the time it does not require a hands-on manager and the franchisee can successfully operate multiple locations. The salons are managed by a licensed cosmetologist and the franchisee focuses on working with the manager and providing the marketing and business side. They make a great team," Olsen says.
"Once franchisees get comfortable owning one salon, they typically buy a few more. After the initial learning curve, adding more locations can be a great way to increase overall profitability," she says.