Food establishments are the most popular American franchises. Quick service restaurants comprise 25.6% of all franchise establishments in the United States, followed by personal services with 14.7%, business services with 14.3%, and commercial and residential services with 8.7%. While food remains the largest business segment by establishments in the franchise sector, the industry composition has changed in recent years.
In an interview with 24/7 Wall St., Tracy Stapp Herold, special project editor at Entrepreneur, identified one franchise segment that has been increasing in popularity. “In the last 20 years or so, service and personal service franchises that are really more about serving people, helping people, education, enrichment, or just general care for seniors or young children, have really risen up and become a big segment of the franchise world,” Herold said.
As the baby boom generation ages into retirement, they increasingly require medical care and other services. The number of Americans aged 65 and over has increased from 12% of the population in 2000 to 15% today, and it will reach more than 20% of the population by 2030. One example of a fast-growing franchise catering to senior citizens includes Visiting Angels, an in-home elder care services company that grew from 435 U.S. franchises in 2012 to 574 in 2017.
The entertainment and recreation industry, which includes establishments such as trampoline parks, paint-and-sip studios, and escape rooms, is another sector growing in popularity in the franchise world. “Maybe it’s a product of the economy being on an upswing,” Herold explained. “I think that people are more open to doing things that aren’t necessities, or things that are fun.”
Other business segments that are thriving in the franchise industry include Asian food, beauty services, fitness, frozen desserts, pest control, pets, and staffing and recruiting services.
Additionally, as business becomes easier to conduct online, franchises that are low cost or can be run from home have become more popular. “People are looking to maybe not necessarily make a huge investment, leave their job, or change their life. If it’s something they can do part-time or do from home without having to have retail space, those [franchises] are only going to keep getting more popular.” One example is Pop-A-Lock, an on-call locksmith company that can be run out of one’s home. Pop-A-Lock has grown from 264 franchises in the United States in 2012 to 518 in 2017.
To determine the fastest growing franchises, 24/7 Wall St. ranked businesses on franchise establishment growth in the United States from 2012 to 2017 with data from Entrepreneur magazine. Only companies included in Entrepreneur’s 39th annual Franchise 500 ranking with at least 500 U.S. franchise establishments were considered.