I’ve always enjoyed reading surveys because they give me a glimpse into how other people are thinking, what’s important to them, and where they stand on certain issues. This new Franchise Direct survey is the only one I’ve come across (so far) on the topic of franchising, so sharing this on the blog was really a no-brainer.
Participants of the Franchise Direct survey were invited through announcements sent through company newsletter mailing lists as well as postings on a number of high-traffic social media websites and blogs. With just 335 respondents, the top franchise portal was quick to admit that “the results from this survey cannot be generalized to the entire prospective franchisee population. Instead, these results are representative of the opinions in a certain segment of the prospective franchisee population.” But despite the limitations of this survey, it still provides a lot of relevant clues on what prospective franchisees are looking for today.
Here are the top answers to the survey questions (in 2 cases, respondents were allowed to select all responses that apply*). To read the complete survey results, please click here.
Have you ever operated your own business before? 43.9% said no
Do you have management experience? 72.2% said yes
How soon are you looking to buy a franchise? 38.8% said within 6 months
Has the current economic climate influenced your decision to look into franchising? 49.3% said yes
How do you plan on financing? 49%* said through personal savings/retirement funds
What percentage of the total investment are you looking to finance through outsiders? 19.4% said between 25 to 50%
How much are you planning to spend to start a franchise? 47.5% said below $100K
Are you planning on investing in a franchise on your own or as part of a group? 59.7% said on my own
How many franchises have, or will, you solicit information from before deciding? 32.2% said less than 5
Where do you go to research information on possible franchises? 74.6%* said online franchise directories
Have you sought or do you plan on seeking the advice of a franchise consultant? 52.8% said yes
Have you sought or do you plan on seeking the advice of a certified public accountant (CPA)? 60.6% said yes
Have you sought or do you plan on seeking the advice of a lawyer? 66.6% said yes
Which franchise industries are you most interested in? around 30% said food franchises
What are you looking for in potential franchise opportunities? Potential earnings ranked highest
For me, the most interesting part of the survey is the section on the most popular franchise industries among prospective franchisees. It’s no surprise that the top response was food franchises because this is such a broad category, with so many brands and niches to choose from. I am surprised that business services had such a strong showing, ranking second, because there really aren’t a lot of well known options in this category. Coming in at number 3 are vending opportunities (which explains why my posts on Fresh Healthy Vending and h.u.m.a.n Healthy Vending have been a lot more popular than I ever expected).
Rounding out the top 5 are restaurant franchises (which clearly overlaps with food franchises) and home business services franchises. Also doing well in the survey are retail franchises, coffee franchises, entertainment franchises, cleaning franchises, and children’s franchises. Home and healthcare franchises and computer and Internet franchises were next in line.
One category that I thought would fare better is the fitness franchise category because of the popularity of Anytime Fitness and Snap Fitness. But this category is dominated by just a few names, whereas the other categories (although not all) have a lot more players competing for the attention of prospective franchisees.