FR ANCHISING TRENDS IN 2022
New Year, New Trends
Franchise consultant Gary Prenevost examines what he expects to come for franchising trends and changes in 2022 BY GARY PRENEVOST
A
t the beginning of every year, one of the most common questions I get asked is, “what are the hottest trends in franchising right now?” For nearly two years, the COVID-19 pandemic has been with us and has influenced how we see and experience many things—employment, work/life balance, our spending habits, where and how we shop, eat, play, and more. While not a trend, one new result of the pandemic is how Canadians are approaching risk. Our inability to spend money on travel, food, and entertainment throughout most of the pandemic has resulted in a surplus of savings. As we return to the “new normal,” this surplus will either be spent over time, or invested. • Spending: I believe that we’ll see sustained increased spending over the next two to three years, creating a post-pandemic surge—which will be driven into additional revenues for franchisees and small business owners. • Investing: Savvy investors are watching for opportunities where companies are on the leading edge of shifting trends, and some of those people will look to franchise ownership, either as full-time owner/operators, or as a passive engagement (semi-absentee) multi-unit wealth creation strategy. Some of these shifts in consumer behaviour will be with us for years to come, so if you’re considering franchise ownership, you’ll want to pay attention to these five trends.
20 Canadian Franchise Association
1. Home is our sanctuary Most Canadians have been experiencing a forced workfrom-home life during the pandemic, creating a lot of adjustment and stress for many families as they’ve had to come to terms with learning how to share space and manage privacy issues while working. Despite these adjustments, many people have come to realize that they would rather work from home than spend endless hours commuting, and going into the office just to be “seen.” The importance of functional home space has never been more important, and this has driven a huge increase in demand for home improvement franchises, from the traditional three per cent year-over-year industry growth rate to more than nine per cent throughout the pandemic. Also fueling this astounding growth is the intense real estate market, since investing in home improvements also increases home values. There are several sub-categories within the home improvement sector, and almost every one of those categories has benefited from this surge. We expect things to continue at the current pace for at least another two to three years. Many home improvement franchise opportunities are also work-from-home models themselves, often coming in at under 50 per cent of the cost of brick and mortar location-based franchises. Because these businesses have much lower operating expenses and require fewer staff than location-based businesses, they also enjoy substantially higher profit-per-revenue-dollar ratios, and thus are popular with prospective franchisees who possess good project management and people skills.
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